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The following is a list of undervalued stocks, as defined by the PEG ratio. All of the stocks in this list have PEG values below 1.0, which usually signal undervalued conditions.

In addition, all of these stocks have seen significant institutional buying over the last three months.

The smart money seems to think these stocks are undervalued relative to their growth prospects, what do you think? Full details below.

We last wrote about this screen on November 9, 2010. On that day, the screen produced 19 companies (excluding Psychiatric Solutions, which has been acquired since then). Since then, 10 out of 19 companies mentioned in that article have outperformed the S&P 500 index (a success rate of 52.63%). The screen averaged a return of 7.06% vs. an index return of 4.79%. Click here to access a full breakdown of the screen's past performance.

PEG and short float values 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 six 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.

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

1. Liberty Media Interactive (NASDAQ:LINTA): Catalog & Mail Order Houses Industry. Market cap of $9.6B. PEG ratio at 0.95. Institutional investors currently own 552,640,099 shares vs. 506,177,534 shares held three months ago (+9.18% change). Short float at 1.32%, which implies a short ratio of 2.33 days. The stock has gained 34.65% over the last year.

2. AsiaInfo-Linkage,Inc. (NASDAQ:ASIA): Security Software & Services Industry. Market cap of $1.46B. PEG ratio at 0.97. Institutional investors currently own 31,926,446 shares vs. 31,258,170 shares held three months ago (+2.14% change). Short float at 4.83%, which implies a short ratio of 2.49 days. The stock has lost -34.72% over the last year.

3. Koninklijke Philips Electronics NV (NYSE:PHG): Electronic Equipment Industry. Market cap of $29.24B. PEG ratio at 0.78. Institutional investors currently own 41,225,541 shares vs. 40,461,677 shares held three months ago (+1.89% change). Short float at 0.05%, which implies a short ratio of 0.47 days. The stock has gained 4.04% over the last year.

4. Centrais Electricas Brasileiras S.A. (NYSE:EBR): Electric Utilities Industry. Market cap of $15.47B. PEG ratio at 0.88. Institutional investors currently own 27,514,937 shares vs. 27,014,013 shares held three months ago (+1.85% change). Short float at 0.64%, which implies a short ratio of 3.71 days. The stock has lost -10.76% over the last year.

5. Jos. A Bank Clothiers Inc. (NASDAQ:JOSB): Apparel Stores Industry. Market cap of $1.14B. PEG ratio at 0.95. Institutional investors currently own 28,465,549 shares vs. 27,991,202 shares held three months ago (+1.69% change). Short float at 16.08%, which implies a short ratio of 9.94 days. The stock has lost -7.08% over the last year.

Source: Smart Money's Top 5 Value Plays