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The following is a list of stocks in a new uptrend, as defined by the Average Directional Index, or ADX(14) index. These stocks are also being underestimated by Wall Street analysts--all of them have easily beaten analyst earnings estimates over the past year.

To create the list, we started with a universe of stocks in an uptrend that have an ADX(14) value above +20, which signals strengthening upward momentum. We then reduced the size of this universe by only focusing on stocks that have a high average "surprise" rate when comparing actual earnings results to expected earnings results. (Complete calculations can be accessed here)

Earnings surprise data sourced from AOL Money, ADX values sourced from Stockcharts.

Interactive Chart: Press Play to see how analyst ratings have changed for all the stocks mentioned below.

The list has been sorted alphabetically.

1. DSP Group Inc. (DSPG): Communication Equipment Industry. Market cap of $185.87M. Daily ADX Line(14) at 21.001. Over the past year, the company's earnings have exceeded analyst estimates by an average of 70.43%. Short float at 2.82%, which implies a short ratio of 8.24 days. The stock has gained 40.39% over the last year.

2. GrafTech International Ltd. (GTI): Industrial Electrical Equipment Industry. Market cap of $2.28B. Daily ADX Line(14) at 20.233. Over the past year, the company's earnings have exceeded analyst estimates by an average of 47.77%. Short float at 5.04%, which implies a short ratio of 5.71 days. The stock has gained 28.37% over the last year.

3. KB Home (KBH): Residential Construction Industry. Market cap of $1.1B. Daily ADX Line(14) at 20.529. Over the past year, the company's earnings have exceeded analyst estimates by an average of 69.46%. Short float at 19.91%, which implies a short ratio of 5.19 days. The stock has lost -13.12% over the last year.

4. LoopNet, Inc. (LOOP): Property Management Industry. Market cap of $385.44M. Daily ADX Line(14) at 20.428. Over the past year, the company's earnings have exceeded analyst estimates by an average of 32.77%. Short float at 3.53%, which implies a short ratio of 7.33 days. The stock has gained 19.52% over the last year.

5. Rudolph Technologies Inc. (RTEC): Scientific & Technical Instruments Industry. Market cap of $248.53M. Daily ADX Line(14) at 20.177. Over the past year, the company's earnings have exceeded analyst estimates by an average of 36.64%. Short float at 3.36%, which implies a short ratio of 5.23 days. The stock has gained 19.43% over the last year.

Disclosure: No positions

Source: 5 Underestimated Companies in a New Uptrend