Top 19 Most Undervalued Stocks With Decreasing Short Interest

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Includes: ACE, BBY, BG, CIT, F, HES, LFC, LRCX, MTU, MU, STX, T, TEL, TJX, TKR, TTM, UMC, UNH, WDC
by: Kapitall

The following is a list of undervalued stocks, with Price to Earnings Growth (PEG) ratios below 1. All of these stocks have seen a significant decrease in shares shorted between 9/30 - 12/31.

This list might offer an interesting starting point to a value-oriented investor. Short sellers seem to think the upside potential outweighs the downside potential of these names--what do you think? Full details below.

PEG ratios sourced from Finviz, short trends data sourced from AOL Money.

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.

The list has been sorted by the change in shares shorted over the last three months. (Note: All trends described occur between 9/30 - 12/31)

1. ACE Limited (NYSE:ACE): Property & Casualty Insurance Industry. Market cap of $20.63B. PEG at 0.65. Shares shorted have decreased from 6.91M to 2.29M. Short float at 0.68%, which implies a short ratio of 1.31 days. The stock has gained 29.07% over the last year.

2. Unitedhealth Group, Inc. (NYSE:UNH): Health Care Plans Industry. Market cap of $44.84B. PEG at 0.9. Shares shorted have decreased from 24.09M to 8.29M. Short float at 0.76%, which implies a short ratio of 1.05 days. The stock has gained 22.29% over the last year.

3. China Life Insurance Co. Ltd. (NYSE:LFC): Life Insurance Industry. Market cap of $117.54B. PEG at 0.99. Shares shorted have decreased from 3.56M to 1.37M. Short float at 0.23%, which implies a short ratio of 2.48 days. The stock has lost -9.5% over the last year.

4. CIT Group, Inc. (NYSE:CIT): Regional Bank. Market cap of $9.81B. PEG at 0.43. Shares shorted have decreased from 5.1M to 2.29M. Short float at 1.14%, which implies a short ratio of 1.72 days. The stock has gained 53.06% over the last year.

5. DIRECTV (DTV): CATV Systems Industry. Market cap of $36.37B. PEG at 0.95. Shares shorted have decreased from 26.45M to 12.41M. Short float at 1.54%, which implies a short ratio of 1.62 days. The stock has gained 27.58% over the last year.

6. Bunge Ltd. (NYSE:BG): Farm Products Industry. Market cap of $10.27B. PEG at 0.33. Shares shorted have decreased from 10M to 4.77M. Short float at 3.32%, which implies a short ratio of 4.25 days. The stock has gained 3.11% over the last year.

7. Hess Corporation (NYSE:HES): Oil & Gas Refining & Marketing Industry. Market cap of $26.98B. PEG at 0.69. Shares shorted have decreased from 6.69M to 3.23M. Short float at 1.1%, which implies a short ratio of 1.08 days. The stock has gained 32.45% over the last year.

8. Lam Research Corporation (NASDAQ:LRCX): Semiconductor Equipment & Materials Industry. Market cap of $6.48B. PEG at 0.45. Shares shorted have decreased from 6.91M to 3.53M. Short float at 2.89%, which implies a short ratio of 1.57 days. The stock has gained 43.1% over the last year.

9. Tata Motors Ltd. (NYSE:TTM): Auto Manufacturer. Market cap of $15.18B. PEG at 0.77. Shares shorted have decreased from 12.75M to 6.72M. Short float at 2.07%, which implies a short ratio of 2.27 days. The stock has gained 56.01% over the last year.

10. Tyco Electronics, Ltd. (NYSE:TEL): Diversified Electronics Industry. Market cap of $16.23B. PEG at 0.7. Shares shorted have decreased from 3.87M to 2.19M. Short float at 0.49%, which implies a short ratio of 1.2 days. The stock has gained 48.28% over the last year.

11. Best Buy Co. Inc. (NYSE:BBY): Electronics Stores Industry. Market cap of $14.04B. PEG at 0.95. Shares shorted have decreased from 20.88M to 12.8M. Short float at 4%, which implies a short ratio of 1.72 days. The stock has lost -7.09% over the last year.

12. Timken Co. (NYSE:TKR): Machine Tools & Accessories Industry. Market cap of $4.89B. PEG at 0.66. Shares shorted have decreased from 1.71M to 1.05M. Short float at 1.32%, which implies a short ratio of 1.42 days. The stock has gained 104.55% over the last year.

13. Ford Motor Co. (NYSE:F): Auto Manufacturer. Market cap of $64.77B. PEG at 0.76. Shares shorted have decreased from 289.02M to 179.5M. Short float at 5.29%, which implies a short ratio of 2.13 days. The stock has gained 60.78% over the last year.

14. SanDisk Corp. (SNDK): Semiconductor Industry. Market cap of $12.37B. PEG at 0.76. Shares shorted have decreased from 18.4M to 11.44M. Short float at 4.96%, which implies a short ratio of 1.32 days. The stock has gained 88.6% over the last year.

15. United Microelectronics Corporation (NYSE:UMC): Semiconductor Equipment & Materials Industry. Market cap of $8.57B. PEG at 0.36. Shares shorted have decreased from 11.64M to 7.25M. Short float at 0.3%, which implies a short ratio of 2.7 days. The stock has lost -18.52% over the last year.

16. Mitsubishi UFJ Financial Group, Inc. (NYSE:MTU): Money Center Banks Industry. Market cap of $78.41B. PEG at 0.58. Shares shorted have decreased from 3.4M to 2.17M. Short float at 0.02%, which implies a short ratio of 0.94 days. The stock has gained 0.91% over the last year.

17. Seagate Technology PLC (NASDAQ:STX): Data Storage Devices Industry. Market cap of $6.72B. PEG at 0.43. Shares shorted have decreased from 15.08M to 9.71M. Short float at 2.09%, which implies a short ratio of 0.69 days. The stock has lost -19.77% over the last year.

18. The TJX Companies, Inc. (NYSE:TJX): Department Stores Industry. Market cap of $18.19B. PEG at 0.97. Shares shorted have decreased from 11.81M to 7.81M. Short float at 1.98%, which implies a short ratio of 2.2 days. The stock has gained 24.92% over the last year.

19. Micron Technology Inc. (NASDAQ:MU): Semiconductor Industry. Market cap of $9.68B. PEG at 0.74. Shares shorted have decreased from 109M to 72.85M. Short float at 7.87%, which implies a short ratio of 2.31 days. The stock has lost -4.15% over the last year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.