The following is a list of high growth stocks, as defined by their projected EPS growth (projected >15% over the next 5 years). In addition, these companies are significantly undervalued when comparing their current price to the fair value price, calculated by the Graham Number equation.

*click for expanded image*s

The Graham Number is what Benjamin Graham considered to be the maximum price an investor should pay for a stock. And it is calculated as follow:

The Graham Number = Fair Value of a Stock = Square Root of (22.5) x (Earnings per Share) x (Book Value per Share).

The math of is relatively straightforward. It is predicated on the belief that the price-to-earnings (P/EPS) ratio should be no more than 15, and the price-to-book value (P/BVPS) ratio should be no more than 1.5. Therefore we only include companies that meet both of these criteria.

From these criteria, the product of the two should not be more than 22.5. In other words, (P/EPS of 15) x (P/BVPS of 1.5) = 22.5, from which the equation was created.

Considering the high projected growth and the Graham number, which of these growth stocks do you think is undervalued?

* 1. China Petroleum & Chemical Corp. (NYSE:SNP)*: Independent Oil & Gas Industry. Market cap of $90.74B. Five year projected EPS growth at 18.7%. BVPS at $73.9, diluted EPS at $12.6. Graham number = sqrt(22.5 x $73.9 x $12.6) = $144.74, with the current price at $103.58, this implies an upside of 39.74%. The stock has gained 24.61% over the last year.

* 2. ING Groep NV (NYSE:ING):* Life Insurance Industry. Market cap of $50.52B. Five year projected EPS growth at 28.0%. BVPS at $16.62, diluted EPS at $0.9. Graham number = sqrt(22.5 x $16.62 x $0.9) = $18.35, with the current price at $13.2, this implies an upside of 38.98%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.74). The stock has gained 26.95% over the last year.

* 3. PennyMac Mortgage Investment Trust (NYSE:PMT)*: REIT. Market cap of $507.18M. Five year projected EPS growth at 25.0%. BVPS at $19.01, diluted EPS at $1.44. Graham number = sqrt(22.5 x $19.01 x $1.44) = $24.82, with the current price at $18.13, this implies an upside of 36.89%. The stock has gained 9.21% over the last year.

* 4. Yingli Green Energy Holding Co. Ltd. (NYSE:YGE)*: Solar Industry. Market cap of $1.77B. Five year projected EPS growth at 23.8%. BVPS at $8.22, diluted EPS at $1.39. Graham number = sqrt(22.5 x $8.22 x $1.39) = $16.03, with the current price at $11.72, this implies an upside of 36.81%. This is a risky stock that is significantly more volatile than the overall market (beta = 3.03). The stock has had a good month, gaining 13.43%.

* 5. Ternium S.A. (NYSE:TX):* Steel & Iron Industry. Market cap of $6.93B. Five year projected EPS growth at 15.2%. BVPS at $29.33, diluted EPS at $3.1. Graham number = sqrt(22.5 x $29.33 x $3.1) = $45.23, with the current price at $33.39, this implies an upside of 35.46%. The stock has lost 11.61% over the last year.

* 6. Boise Inc. (NYSE:BZ): *Paper & Paper Products Industry. Market cap of $723.93M. Five year projected EPS growth at 20.0%. BVPS at $8.02, diluted EPS at $0.75. Graham number = sqrt(22.5 x $8.02 x $0.75) = $11.63, with the current price at $8.66, this implies an upside of 34.34%. This is a risky stock that is significantly more volatile than the overall market (beta = 3.49). The stock is a short squeeze candidate, with a short float at 30.32% (equivalent to 9.66 days of average volume). The stock has gained 26.64% over the last year.

* 7. Gafisa S.A. (NYSE:GFA):* Residential Construction Industry. Market cap of $2.98B. Five year projected EPS growth at 19.82%. BVPS at $10.96, diluted EPS at $1.27. Graham number = sqrt(22.5 x $10.96 x $1.27) = $17.7, with the current price at $13.29, this implies an upside of 33.16%. The stock has lost 1.85% over the last year.

* 8. Sonic Automotive Inc. (NYSE:SAH)*: Auto Dealerships Industry. Market cap of $698.41M. Five year projected EPS growth at 16.35%. BVPS at $8.8, diluted EPS at $1.49. Graham number = sqrt(22.5 x $8.8 x $1.49) = $17.18, with the current price at $12.91, this implies an upside of 33.05%. The stock is a short squeeze candidate, with a short float at 17.2% (equivalent to 9.02 days of average volume). The stock has performed poorly over the last month, losing 10.06%.

* 9. Comtech Telecommunications Corp. (NASDAQ:CMTL):* Communication Equipment Industry. Market cap of $776.95M. Five year projected EPS growth at 35.0%. BVPS at $25.61, diluted EPS at $2.42. Graham number = sqrt(22.5 x $25.61 x $2.42) = $37.34, with the current price at $28.97, this implies an upside of 28.9%. The stock is a short squeeze candidate, with a short float at 6.1% (equivalent to 5.49 days of average volume). The stock has had a good month, gaining 11.79%.

* 10. Cninsure Inc. (NASDAQ:CISG):* Insurance Brokers Industry. Market cap of $676.53M. Five year projected EPS growth at 22.97%. BVPS at $9.3, diluted EPS at $1.3. Graham number = sqrt(22.5 x $9.3 x $1.3) = $16.49, with the current price at $13.27, this implies an upside of 24.29%. The stock is a short squeeze candidate, with a short float at 16.01% (equivalent to 10.71 days of average volume). The stock has lost 52.19% over the last year.

* 11. Education Management Corporation (NASDAQ:EDMC):* Education & Training Services Industry. Market cap of $1.56B. Five year projected EPS growth at 16.67%. BVPS at $15.6, diluted EPS at $1.78. Graham number = sqrt(22.5 x $15.6 x $1.78) = $25.0, with the current price at $20.31, this implies an upside of 23.07%. PEG ratio at 0.77, and P/FCF ratio at 7.54. The stock is a short squeeze candidate, with a short float at 6.94% (equivalent to 21.79 days of average volume). The stock has lost 19.64% over the last year.

* 12. Kyocera Corp. (NYSE:KYO):* Diversified Electronics Industry. Market cap of $18.88B. Five year projected EPS growth at 63.7%. BVPS at $88.02, diluted EPS at $7.42. Graham number = sqrt(22.5 x $88.02 x $7.42) = $121.22, with the current price at $98.95, this implies an upside of 22.51%. The stock has lost 1.7% over the last year.

* 13. The Dolan Company (NYSE:DM):* Publishing Industry. Market cap of $375.37M. Five year projected EPS growth at 16.98%. BVPS at $9.24, diluted EPS at $1.08. Graham number = sqrt(22.5 x $9.24 x $1.08) = $14.98, with the current price at $12.29, this implies an upside of 21.92%. PEG ratio at 0.67, and P/FCF ratio at 6.79. The stock has gained 15.41% over the last year.

* 14. STMicroelectronics NV (NYSE:STM):* Semiconductor Industry. Market cap of $11.22B. Five year projected EPS growth at 21.8%. BVPS at $9.93, diluted EPS at $0.92. Graham number = sqrt(22.5 x $9.93 x $0.92) = $14.34, with the current price at $11.95, this implies an upside of 19.98%. PEG ratio at 0.62, and P/FCF ratio at 12.54. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.24%, current ratio at 2.11, and quick ratio at 1.63.

* 15. LDK Solar Co., Ltd. (NYSE:LDK):* Semiconductor Industry. Market cap of $1.67B. Five year projected EPS growth at 21.75%. BVPS at $7.8, diluted EPS at $1.01. Graham number = sqrt(22.5 x $7.8 x $1.01) = $13.31, with the current price at $11.17, this implies an upside of 19.19%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.71). The stock has gained 51.64% over the last year.

*Graham input data sourced from Yahoo! Finance, all other data sourced from Finviz.

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