Interested in companies that use or produce clean energy technology? We searched about 80 of the largest clean tech names, and identified those that were undervalued relative to their Graham number.

Benjamin Graham, the man who developed this equation, was a former mentor of Warren Buffett and is the so-called “Godfather” of value investing.

*click for expanded images *

The Graham Number, or the maximum price an investor should pay for a stock, is derived using only two data points: current earnings per share and current book value per share.

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

The math of the Graham number 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.

We ultimately found 5 companies that met all of these criteria to be undervalued, and we listed them below along with other pertinent data.

Do you think these companies will recover this difference in valuation? Use this list as a starting-off point for your own analysis into clean energy investments.

List sorted by potential upside implied by the Graham Number.

* 1. Yingli Green Energy Holding Co. Ltd. (NYSE:YGE): *Solar Industry. Market cap of $1.72B. BVPS at $8.27, diluted EPS at $1.39. Graham number = sqrt(22.5 x $8.27 x $1.39) = $16.08. Current price at $11.60 (implies a potential upside of 38.64%). This is a risky stock that is significantly more volatile than the overall market (beta = 3.02). It's been a rough couple of days for the stock, losing 5.46% over the last week.

* 2. Ashland Inc. (NYSE:ASH)*: Chemicals Industry. Market cap of $4.51B. BVPS at $49.05, diluted EPS at $4.17. Graham number = sqrt(22.5 x $49.05 x $4.17) = $67.84. Current price at $57.17 (implies a potential upside of 18.66%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.81). The stock has lost 8.77% over the last year.

* 3. Pinnacle West Capital Corporation (NYSE:PNW):* Electric Utilities Industry. Market cap of $4.65B. BVPS at $33.86, diluted EPS at $3.26. Graham number = sqrt(22.5 x $33.86 x $3.26) = $49.84. Current price at $42.89 (implies a potential upside of 16.20%). The stock has gained 16.97% over the last year.

* 4. American Superconductor Corporation (NASDAQ:AMSC):* Diversified Electronics Industry. Market cap of $595.22M. BVPS at $9.86, diluted EPS at $0.86. Graham number = sqrt(22.5 x $9.86 x $0.86) = $13.81. Current price at $11.89 (implies a potential upside of 16.17%). The stock is currently stuck in a downtrend, trading 32.5% below its SMA20, 47.29% below its SMA50, and 58.89% below its SMA200. It's been a rough couple of days for the stock, losing 9.76% over the last week.

* 5. Avista Corp. (NYSE:AVA)*: Diversified Utilities Industry. Market cap of $1.36B. BVPS at $19.71, diluted EPS at $1.65. Graham number = sqrt(22.5 x $19.71 x $1.65) = $27.05. Current price at $23.62 (implies a potential upside of 14.52%). Risk-averse investors may appreciate that AVA has a relatively low correlation to the market (beta = 0.73). The stock has gained 13.67% over the last year.

*EPS and BVPS 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.