Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message|
( followers)  

The following is a list of undervalued stocks, as determined by the Price to Free Cash Flow (P/FCF ratio). In addition, all of these stocks have seen significant institutional buying over the last three months.

To compile the list, we started with a list of stocks with P/FCF ratios below 5 (i.e. free cash flow makes up more than 20% of each stock's valuation). We then narrowed down the list to only focus on those stocks that have seen significant institutional buying over the last three months.

This list might offer an interesting starting point for value investors. Full details below.

P/FCF and short float data sourced from Finviz. Institutional data sourced from Reuters.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top 6 stocks mentioned below. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.

The list has been sorted by the change in institutional ownership over the last three months.

1. FLY Leasing Limited (NYSE:FLY): Rental & Leasing Services Industry. Market cap of $386.17M. P/FCF ratio at 3.8. Institutional investors currently own 8,889,171 shares vs. 5,629,818 shares held three months ago (+57.89% change). Short float at 0.03%, which implies a short ratio of 0.15 days. The stock has gained 62.62% over the last year.

2. Excel Maritime Carriers, Ltd. (NYSE:EXM): Shipping Industry. Market cap of $458.62M. P/FCF ratio at 4.98. Institutional investors currently own 13,186,733 shares vs. 10,591,098 shares held three months ago (+24.51% change). Short float at 5.83%, which implies a short ratio of 3.9 days. The stock has lost -8.6% over the last year.

3. American International Group, Inc. (NYSE:AIG): Property & Casualty Insurance Industry. Market cap of $38.45B. P/FCF ratio at 1.96. Institutional investors currently own 89,019,305 shares vs. 74,371,222 shares held three months ago (+19.7% change). Short float at 14.23%, which implies a short ratio of 3.26 days. The stock has gained 92.19% over the last year.

4. Boise Inc. (NYSE:BZ): Paper & Paper Products Industry. Market cap of $672.15M. P/FCF ratio at 3. Institutional investors currently own 83,730,625 shares vs. 72,623,683 shares held three months ago (+15.29% change). Short float at 18.31%, which implies a short ratio of 9.01 days. The stock has gained 49.34% over the last year.

5. China Southern Airlines Co. Ltd. (NYSE:ZNH): Major Airlines Industry. Market cap of $4.88B. P/FCF ratio at 3.99. Institutional investors currently own 1,565,510 shares vs. 1,360,580 shares held three months ago (+15.06% change). Short float at 0.56%, which implies a short ratio of 2.96 days. The stock has gained 95.95% over the last year.

6. American Equity Investment Life Holding Co. (NYSE:AEL): Life Insurance Industry. Market cap of $736.18M. P/FCF ratio at 1.91. Institutional investors currently own 62,314,647 shares vs. 55,063,561 shares held three months ago (+13.17% change). Short float at 10.46%, which implies a short ratio of 9.66 days. The stock has gained 70.28% over the last year.

7. China Eastern Airlines Corp. Ltd. (NYSE:CEA): Major Airlines Industry. Market cap of $5.73B. P/FCF ratio at 4.29. Institutional investors currently own 1,551,346 shares vs. 1,400,358 shares held three months ago (+10.78% change). Short float at 0.07%, which implies a short ratio of 1.98 days. The stock has gained 44.76% over the last year.

8. Advance America, Cash Advance Centers Inc. (NYSE:AEA): Credit Services Industry. Market cap of $350.53M. P/FCF ratio at 2.87. Institutional investors currently own 47,754,248 shares vs. 43,485,575 shares held three months ago (+9.82% change). Short float at 2.4%, which implies a short ratio of 4.06 days. The stock has gained 7.43% over the last year.

9. CNO Financial Group, Inc. (NYSE:CNO): Accident & Health Insurance Industry. Market cap of $1.7B. P/FCF ratio at 2.27. Institutional investors currently own 233,243,197 shares vs. 212,448,666 shares held three months ago (+9.79% change). Short float at 8.36%, which implies a short ratio of 11.68 days. The stock has gained 35.6% over the last year.

10. Clearwater Paper Corporation (NYSE:CLW): Paper & Paper Products Industry. Market cap of $898.88M. P/FCF ratio at 4.42. Institutional investors currently own 10,409,896 shares vs. 9,632,088 shares held three months ago (+8.08% change). Short float at 3.49%, which implies a short ratio of 5.13 days. The stock has gained 42.44% over the last year.

11. Wilmington Trust Corporation (NYSE:WL): Regional Bank. Market cap of $397.02M. P/FCF ratio at 2.71. Institutional investors currently own 76,416,422 shares vs. 71,376,840 shares held three months ago (+7.06% change). Short float at 3.46%, which implies a short ratio of 0.85 days. The stock has lost -65.06% over the last year.

12. Navistar International Corp. (NYSE:NAV): Trucks & Other Vehicles Industry. Market cap of $4.16B. P/FCF ratio at 4.85. Institutional investors currently own 73,786,537 shares vs. 70,424,510 shares held three months ago (+4.77% change). Short float at 8.62%, which implies a short ratio of 4.58 days. The stock has gained 46.68% over the last year.

13. Vonage Holdings Corporation (NYSE:VG): Diversified Communication Services Industry. Market cap of $476.4M. P/FCF ratio at 3.2. Institutional investors currently own 111,012,388 shares vs. 106,016,614 shares held three months ago (+4.71% change). Short float at 2.83%, which implies a short ratio of 2.13 days. The stock has gained 60% over the last year.

14. MCG Capital Corporation (NASDAQ:MCGC): Asset Management Industry. Market cap of $533.2M. P/FCF ratio at 4.13. Institutional investors currently own 38,854,903 shares vs. 37,411,564 shares held three months ago (+3.86% change). Short float at 2.52%, which implies a short ratio of 4.72 days. The stock has gained 71.67% over the last year.

15. Valassis Communications Inc. (NYSE:VCI): Marketing Services Industry. Market cap of $1.61B. P/FCF ratio at 3.55. Institutional investors currently own 49,240,099 shares vs. 47,417,602 shares held three months ago (+3.84% change). Short float at 9.72%, which implies a short ratio of 8.17 days. The stock has gained 77.16% over the last year.

16. Regions Financial Corp. (NYSE:RF): Regional Bank. Market cap of $8.79B. P/FCF ratio at 3.97. Institutional investors currently own 852,403,528 shares vs. 821,250,701 shares held three months ago (+3.79% change). Short float at 4.66%, which implies a short ratio of 2.13 days. The stock has gained 33.08% over the last year.

17. Synovus Financial Corp. (NYSE:SNV): Regional Bank. Market cap of $2.07B. P/FCF ratio at 4.41. Institutional investors currently own 621,302,045 shares vs. 599,804,594 shares held three months ago (+3.58% change). Short float at 12.13%, which implies a short ratio of 6.08 days. The stock has gained 30.69% over the last year.

18. Gannett Co., Inc. (NYSE:GCI): Newspapers Industry. Market cap of $3.61B. P/FCF ratio at 4.31. Institutional investors currently own 230,649,361 shares vs. 223,029,323 shares held three months ago (+3.42% change). Short float at 11.16%, which implies a short ratio of 5.67 days. The stock has gained 2.72% over the last year.

19. SUPERVALU Inc. (NYSE:SVU): Grocery Stores Industry. Market cap of $2.04B. P/FCF ratio at 3. Institutional investors currently own 195,597,594 shares vs. 189,986,791 shares held three months ago (+2.95% change). Short float at 13.61%, which implies a short ratio of 4.74 days. The stock has lost -21.83% over the last year.

20. The McClatchy Company (NYSE:MNI): Newspapers Industry. Market cap of $396.76M. P/FCF ratio at 1.98. Institutional investors currently own 58,039,846 shares vs. 56,389,717 shares held three months ago (+2.93% change). Short float at 29.83%, which implies a short ratio of 18.97 days. The stock has gained 33.05% over the last year.

Source: 20 Undervalued Stocks Being Snapped Up by Smart Money