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Many analysts prefer to use free cash flow as a measure of firm value – not only because free cash flow is used to reinvest into the firm, but also because it funds the dividend paid to shareholders.

Using levered free cash flow, the free cash flow after paying interest on outstanding debt and the principal of maturing debt, we wanted to look among underperforming stocks for potentially undervalued opportunities.

Below we present a list of 11 stocks that have seen losses over the past quarter. All of these stocks look attractive from a valuation perspective - they have all generated significant levered free cash flow relative to market cap over the last year.

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Do you think the recent selling pressure on these names is warranted? Use this list as a starting-off point for your own analysis.

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

1. Manulife Financial Corporation (MFC): Life Insurance Industry. Market cap of $31.21B. The stock has lost 2.67% over the last quarter. TTM levered free cash flow at $12.90B, which is 41.33% of market cap. This is a risky stock that is significantly more volatile than the overall market (beta = 2.03). The stock has gained 5.17% over the last year.

2. General Motors Company (GM): Auto Manufacturer. Market cap of $51.57B. The stock has lost 7.40% over the last quarter. TTM levered free cash flow at $18.84B, which is 36.53% of market cap.

3. Ford Motor Co. (F): Auto Manufacturer. Market cap of $57.52B. The stock has lost 1.62% over the last quarter. TTM levered free cash flow at $18.77B, which is 32.63% of market cap. This is a risky stock that is significantly more volatile than the overall market (beta = 2.36). The stock has gained 22.77% over the last year.

4. Nippon Telegraph & Telephone Corp. (NTT): Telecom Services Industry. Market cap of $61.69B. The stock has lost 0.72% over the last quarter. TTM levered free cash flow at $10.64B, which is 17.25% of market cap. The stock has gained 16.14% over the last year.

5. Honda Motor Co., Ltd. (HMC): Auto Manufacturer. Market cap of $70.27B. The stock has lost 11.36% over the last quarter. TTM levered free cash flow at $11.13B, which is 15.84% of market cap. The stock has gained 18.99% over the last year.

6. Nokia Corporation (NOK): Communication Equipment Industry. Market cap of $32.67B. The stock has lost 19.55% over the last quarter. TTM levered free cash flow at $4.89B, which is 14.97% of market cap. It offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 6.34%, current ratio at 1.65, and quick ratio at 1.49. The stock has lost 17.62% over the last year.

7. Activision Blizzard, Inc. (ATVI): Multimedia & Graphics Software Industry. Market cap of $13.03B. The stock has lost 1.74% over the last quarter. TTM levered free cash flow at $1.46B, which is 11.20% of market cap. The stock has gained 6.89% over the last year.

8. Target Corp. (TGT): Discount, Variety Stores Industry. Market cap of $34.10B. The stock has lost 7.54% over the last quarter. TTM levered free cash flow at $3.81B, which is 11.17% of market cap. The stock has lost 10.71% over the last year.

9. Xerox Corp. (XRX): Business Equipment Industry. Market cap of $14.17B. The stock has lost 6.47% over the last quarter. TTM levered free cash flow at $1.54B, which is 10.87% of market cap. The stock has lost 1.27% over the last year.

10. Lockheed Martin Corporation (LMT): Aerospace/Defense Products & Services Industry. Market cap of $27.41B. The stock has lost 1.74% over the last quarter. TTM levered free cash flow at $2.86B, which is 10.44% of market cap. The stock has lost 3.47% over the last year.

11. America Movil S.A.B. de C.V. (AMX): Wireless Communications Industry. Market cap of $85.07B. The stock has lost 9.91% over the last quarter. TTM levered free cash flow at $8.68B, which is 10.20% of market cap. It's been a rough couple of days for the stock, losing 7.09% over the last week.

*Levered free cash flow sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: Rebound Ideas: 11 Underperforming Stocks With Significant Free Cash Flows