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Given that institutional investors often have an edge over other market participants – their experience, resources and networks - we decided to look at low P/FCF stocks that have seen significant institutional buying during the most recent quarters. Our goal: Find the smart money’s favorite undervalued stocks.

All the companies in this list have market caps above $300M, and are trading with a Price to Free Cash Flow ratio below five (i.e. P/FCF < 5). In other words, free cash flow makes up more than 20% of each company's overall valuation.

Considering the institutional interest and valuation metrics, which of these stocks do you find to be more attractive? Full details below.

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.

List sorted by P/FCF.

1. Morgan Stanley (MS): Investment Brokerage Industry. Market cap of $42.04B. P/FCF at 1.11. Institutional investors purchased 27.1M shares during the current quarter and 22.1M shares during the previous quarter. The stock has lost 5.27% over the last year.

2. The McClatchy Company (MNI): Newspapers Industry. Market cap of $308.62M. P/FCF at 1.47. Institutional investors purchased 6.2M shares during the current quarter and 1.1M shares during the previous quarter. This is a risky stock that is significantly more volatile than the overall market (beta = 3.2). The stock is also a short squeeze candidate, with a short float at 35.87% (equivalent to 22.95 days of average volume). The stock has had a couple of great days, gaining 10.% over the last week.

3. American Equity Investment Life Holding Co. (AEL): Life Insurance Industry. Market cap of $768.40M. P/FCF at 1.85. Institutional investors purchased 1.4M shares during the current quarter and 7.5M shares during the previous quarter. The stock is a short squeeze candidate, with a short float at 11.14% (equivalent to 11.47 days of average volume). The stock has gained 25.95% over the last year.

4. Barclays PLC (BCS): Foreign Money Center Banks Industry. Market cap of $56.23B. P/FCF at 1.88. Institutional investors purchased 3.7M shares during the current quarter and 4.2M shares during the previous quarter. This is a risky stock that is significantly more volatile than the overall market (beta = 2.52). The stock has lost 13.04% over the last year.

5. Regions Financial Corp. (RF): Regional Bank. Market cap of $9.03B. P/FCF at 2.37. Institutional investors purchased 32.6M shares during the current quarter and 35.5M shares during the previous quarter. The stock has lost 5.4% over the last year.

6. US Airways Group, Inc. (LCC): Major Airlines Industry. Market cap of $1.46B. P/FCF at 2.42. Institutional investors purchased 3.8M shares during the current quarter and 5.3M shares during the previous quarter. The stock has gained 23.56% over the last year.

7. CNO Financial Group, Inc. (CNO): Accident & Health Insurance Industry. Market cap of $1.81B. P/FCF at 2.47, PEG ratio at 0.67. Institutional investors purchased 1.7M shares during the current quarter and 22.0M shares during the previous quarter. The stock is a short squeeze candidate, with a short float at 8.09% (equivalent to 10.52 days of average volume). The stock has gained 17.97% over the last year.

8. PacWest Bancorp (PACW): Regional Bank. Market cap of $729.77M. P/FCF at 3.13. Institutional investors purchased 220.0K shares during the current quarter and 626.0K shares during the previous quarter. The stock is a short squeeze candidate, with a short float at 9.52% (equivalent to 16.79 days of average volume). The stock has lost 10.33% over the last year.

9. China Eastern Airlines Corp. Ltd. (CEA): Major Airlines Industry. Market cap of $4.56B. P/FCF at 3.39. Institutional investors purchased 9.2K shares during the current quarter and 264.1K shares during the previous quarter. The stock has had a couple of great days, gaining 9.01% over the last week.

10. KeyCorp (KEY): Money Center Banks Industry. Market cap of $8.29B. P/FCF at 3.48. Institutional investors purchased 12.5M shares during the current quarter and 2.0M shares during the previous quarter. The stock has gained 11.51% over the last year.

11. E*TRADE Financial Corporation (ETFC): Investment Brokerage Industry. Market cap of $3.53B. P/FCF at 3.65. Institutional investors purchased 6.1M shares during the current quarter and 18.8M shares during the previous quarter.

12. Hartford Financial Services Group Inc. (HIG): Property & Casualty Insurance Industry. Market cap of $11.88B. P/FCF at 3.79. Institutional investors purchased 8.8M shares during the current quarter and 10.2M shares during the previous quarter.

13. FLY Leasing Limited (FLY): Rental & Leasing Services Industry. Market cap of $354.44M. P/FCF at 3.82. Institutional investors purchased 1.6M shares during the current quarter and 3.2M shares during the previous quarter. The stock has gained 38.09% over the last year.

14. Citigroup, Inc. (C): Money Center Banks Industry. Market cap of $129.87B. P/FCF at 3.87. Institutional investors purchased 3.4B shares during the current quarter and 1.5B shares during the previous quarter.

15. Principal Financial Group Inc. (PFG): Asset Management Industry. Market cap of $10.22B. P/FCF at 3.99. Institutional investors purchased 4.3M shares during the current quarter and 5.1M shares during the previous quarter. The stock has gained 11.44% over the last year.

16. American International Group, Inc. (AIG): Property & Casualty Insurance Industry. Market cap of $65.59B. P/FCF at 4.01. Institutional investors purchased 13.4M shares during the current quarter and 3.5M shares during the previous quarter. The stock has gained 27.46% over the last year.

17. Boise Inc. (BZ): Paper & Paper Products Industry. Market cap of $751.39M. P/FCF at 4.22, PEG ratio at 0.63. Institutional investors purchased 3.9M shares during the current quarter and 5.6M shares during the previous quarter. The stock is a short squeeze candidate, with a short float at 30.32% (equivalent to 9.82 days of average volume).

18. AOL, Inc. (AOL): Internet Information Providers Industry. Market cap of $2.14B. P/FCF at 4.32. Institutional investors purchased 2.4M shares during the current quarter and 281.0K shares during the previous quarter. The stock is a short squeeze candidate, with a short float at 11.67% (equivalent to 8.86 days of average volume).

19. First Horizon National Corp. (FHN): Regional Bank. Market cap of $2.98B. P/FCF at 4.33. Institutional investors purchased 29.5M shares during the current quarter and 6.5M shares during the previous quarter. Relatively low correlation to the market (beta = 0.63), which may be appealing to risk averse investors. The stock is also a short squeeze candidate, with a short float at 6.61% (equivalent to 5.2 days of average volume). The stock has lost 19.59% over the last year.

20. Alaska Air Group, Inc. (ALK): Regional Airlines Industry. Market cap of $2.21B. P/FCF at 4.34. Institutional investors purchased 739.1K shares during the current quarter and 512.0K shares during the previous quarter. The stock has gained 49.17% over the last year.

21. Fifth Third Bancorp (FITB): Regional Bank. Market cap of $12.71B. P/FCF at 4.47. Institutional investors purchased 19.3M shares during the current quarter and 6.2M shares during the previous quarter.

22. India Fund, Inc. (IFN): Asset Management Industry. Market cap of $1.41B. P/FCF at 4.52. Institutional investors purchased 1.3M shares during the current quarter and 8.7K shares during the previous quarter. The stock has had a couple of great days, gaining 6.3% over the last week.

23. Global Ship Lease, Inc. (GSL): Shipping Industry. Market cap of $386.14M. P/FCF at 4.63. Institutional investors purchased 1.0M shares during the current quarter and 63.2K shares during the previous quarter. The stock has had a couple of great days, gaining 14.38% over the last week.

24. Genworth Financial Inc. (GNW): Life Insurance Industry. Market cap of $6.40B. P/FCF at 4.79. Institutional investors purchased 4.1M shares during the current quarter and 5.3M shares during the previous quarter. This is a risky stock that is significantly more volatile than the overall market (beta = 3.14). The stock has lost 25.44% over the last year.

25. Prudential Financial, Inc. (PRU): Life Insurance Industry. Market cap of $29.74B. P/FCF at 4.98. Institutional investors purchased 22.9M shares during the current quarter and 10.4M shares during the previous quarter.

Institutional transactions sourced from Fidality, short float and performance data sourced from Finviz.

Source: 25 Stocks With Low P/FCF and Institutional Buying