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The following is a list of undervalued stocks, with Price to Earnings Growth (PEG) ratios below 1. Additionally, all of these companies are generating significant amounts of free cash flow, when expressed as a percentage of market cap.



To compile the list, we started with a universe of about 120 companies with PEG below 1. We then collected data on levered free cash flow, and identified the companies that have significant levered free cash flow, when compared to current valuations. (Note: Levered free cash flow is the free cash flow available to the company after paying interest on outstanding debt. It is a measure of the cash flow that is truly available to the company).



Considering the significant amounts of cash, are these companies undervalued? Full details below.



Short float data sourced from Finviz, levered free cash flow data sourced from Yahoo! Finance.



List sorted by levered free cash flow as a percentage of market cap.

1. The Chubb Corporation (CB): Property & Casualty Insurance Industry. Market cap of $17.41B. PEG at 0.91. TTM levered free cashflow at 7.07B, which represents about 40.62% of the company's current market cap.

2. RLI Corp. (RLI): Property & Casualty Insurance Industry. Market cap of $1.18B. PEG at 0.85. TTM levered free cashflow at 463.57M, which represents about 39.36% of the company's current market cap. The stock has gained 17.6% over the last year.

3. Protective Life Corp. (PL): Life Insurance Industry. Market cap of $2.53B. PEG at 0.88. TTM levered free cashflow at 823.08M, which represents about 32.57% of the company's current market cap. Note that this is a risky stock that is significantly more volatile than the overall market (beta = 2.99). The stock has gained 37.51% over the last year.

4. ITT Educational Services Inc. (ESI): Education & Training Services Industry. Market cap of $2.11B. PEG at 0.57. TTM levered free cashflow at 465.11M, which represents about 22.03% of the company's current market cap. Relatively low correlation to the market (beta = 0.57), which may be appealing to risk averse investors. It's been a rough couple of days for the stock, losing 6.78% over the last week.

5. Boise Inc. (BZ): Paper & Paper Products Industry. Market cap of $744.06M. PEG at 0.61. TTM levered free cashflow at 125.87M, which represents about 16.92% of the company's current market cap. Note that this is a risky stock that is significantly more volatile than the overall market (beta = 3.49). The stock has gained 61.83% over the last year.

6. United Online, Inc. (UNTD): Specialty Retail, Other Industry. Market cap of $524.54M. PEG at 0.69. TTM levered free cashflow at 87.56M, which represents about 16.69% of the company's current market cap. The stock has performed poorly over the last month, losing 15.1%.

7. Education Management Corporation (EDMC)
: Education & Training Services Industry. Market cap of $1.43B. PEG at 0.71. TTM levered free cashflow at 226.97M, which represents about 15.86% of the company's current market cap. Relatively low correlation to the market (beta = 0.61), which may be appealing to risk averse investors. The stock has lost 18.79% over the last year.

8. Vishay Intertechnology Inc. (VSH): Semiconductor Industry. Market cap of $2.80B. PEG at 0.74. TTM levered free cashflow at 366.53M, which represents about 13.1% of the company's current market cap. It's been a rough couple of days for the stock, losing 10.61% over the last week.

9. Insight Enterprises Inc. (NSIT):
Application Software Industry. Market cap of $791.83M. PEG at 0.71. TTM levered free cashflow at 95.58M, which represents about 12.07% of the company's current market cap.

10. Unitedhealth Group, Inc. (UNH): Health Care Plans Industry. Market cap of $47.89B. PEG at 0.95. TTM levered free cashflow at 5.43B, which represents about 11.34% of the company's current market cap. The stock has gained 32.7% over the last year.

11. Best Buy Co. Inc. (BBY): Electronics Stores Industry. Market cap of $12.18B. PEG at 0.83. TTM levered free cashflow at 1.24B, which represents about 10.18% of the company's current market cap. The stock is currently stuck in a downtrend, trading -5.47% below its SMA20, -9.2% below its SMA50, and -16.22% below its SMA200.

12. AMERIGROUP Corporation (AGP): Health Care Plans Industry. Market cap of $2.91B. PEG at 0.69. TTM levered free cashflow at 290.97M, which represents about 9.98% of the company's current market cap.

13. Fidelity National Financial, Inc. (FNF):
Surety & Title Insurance Industry. Market cap of $3.11B. PEG at 0.86. TTM levered free cashflow at 303.71M, which represents about 9.77% of the company's current market cap.

14. Buckeye Technologies Inc. (BKI): Paper & Paper Products Industry. Market cap of $942.82M. PEG at 0.89. TTM levered free cashflow at 87.95M, which represents about 9.33% of the company's current market cap.

15. Amedisys Inc. (AMED): Home Health Care Industry. Market cap of $1.06B. PEG at 0.71. TTM levered free cashflow at 95.30M, which represents about 9.0% of the company's current market cap.

16. Coinstar Inc. (CSTR): Business Equipment Industry. Market cap of $1.37B. PEG at 0.94. TTM levered free cashflow at 123.04M, which represents about 9.0% of the company's current market cap. The stock has gained 38.45% over the last year.

17. Lender Processing Services, Inc. (LPS): Business Services Industry. Market cap of $2.91B. PEG at 0.95. TTM levered free cashflow at 260.62M, which represents about 8.94% of the company's current market cap. The stock has lost 18.16% over the last year.

18. NutriSystem Inc. (NTRI): Consumer Services Industry. Market cap of $374.35M. PEG at 0.77. TTM levered free cashflow at 33.46M, which represents about 8.94% of the company's current market cap. The stock is currently stuck in a downtrend, trading -17.96% below its SMA20, -24.25% below its SMA50, and -28.54% below its SMA200.

19. Gentiva Health Services Inc. (GTIV): Home Health Care Industry. Market cap of $858.45M. PEG at 0.98. TTM levered free cashflow at 74.12M, which represents about 8.63% of the company's current market cap. Exhibiting strong upside momentum--currently trading 6.23% above its SMA20, 10.85% above its SMA50, and 18.59% above its SMA200. The stock has had a good month, gaining 17.94%.

20. Lincoln National Corp. (LNC)
: Life Insurance Industry. Market cap of $9.46B. PEG at 0.94. TTM levered free cashflow at 782.25M, which represents about 8.27% of the company's current market cap. The stock has gained 9.87% over the last year.

21. Iconix Brand Group, Inc. (ICON): Apparel Footwear & Accessories Industry. Market cap of $1.54B. PEG at 0.87. TTM levered free cashflow at 121.72M, which represents about 7.89% of the company's current market cap. The stock has gained 37.39% over the last year.

22. Whirlpool Corp. (WHR):
Appliances Industry. Market cap of $6.26B. PEG at 0.75. TTM levered free cashflow at 439.88M, which represents about 7.03% of the company's current market cap. The stock has lost 2.91% over the last year.

23. Gilead Sciences Inc. (GILD): Biotechnology Industry. Market cap of $32.59B. PEG at 0.83. TTM levered free cashflow at 2.22B, which represents about 6.81% of the company's current market cap. The stock has lost 12.99% over the last year.

24. DIRECTV (DTV): CATV Systems Industry. Market cap of $36.06B. PEG at 0.84. TTM levered free cashflow at 2.45B, which represents about 6.79% of the company's current market cap. The stock has gained 30.62% over the last year.

25. Schweitzer-Mauduit International Inc. (SWM): Paper & Paper Products Industry. Market cap of $899.59M. PEG at 0.76. TTM levered free cashflow at 59.85M, which represents about 6.65% of the company's current market cap. The stock is currently stuck in a downtrend, trading -5.92% below its SMA20, -12.26% below its SMA50, and -9.% below its SMA200. The stock has gained 17.03% over the last year.

26. DeVry, Inc. (DV): Education & Training Services Industry. Market cap of $3.61B. PEG at 0.9. TTM levered free cashflow at 237.30M, which represents about 6.57% of the company's current market cap. Relatively low correlation to the market (beta = 0.56), which may be appealing to risk averse investors. The stock has lost 21.56% over the last year.

27. Janus Capital Group Inc. (JNS): Asset Management Industry. Market cap of $2.26B. PEG at 0.95. TTM levered free cashflow at 148.30M, which represents about 6.55% of the company's current market cap. It's been a rough couple of days for the stock, losing 8.5% over the last week.

28. True Religion Apparel Inc. (TRLG): Apparel Clothing Industry. Market cap of $590.93M. PEG at 0.66. TTM levered free cashflow at 37.13M, which represents about 6.28% of the company's current market cap. The stock has lost 20.84% over the last year.

29. Quanex Building Products Corporation (NX):
General Building Materials Industry. Market cap of $709.07M. PEG at 0.64. TTM levered free cashflow at 44.44M, which represents about 6.27% of the company's current market cap. The stock has gained 13.09% over the last year.

30. United Stationers Inc. (USTR): Wholesale, Other Industry. Market cap of $1.57B. PEG at 0.98. TTM levered free cashflow at 97.51M, which represents about 6.21% of the company's current market cap. The stock has gained 14.91% 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.

Source: 30 Cash-Rich, Undervalued Stocks for Your Watchlist