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If you are a value investor that likes to know what institutional investors are buying, then this may be an interesting starting point for your own analysis.

To construct this list we looked for companies with the following characteristics:

- Market cap above $300M
- Price to free cash flow (P/FCF) per shares below 5 (i.e. free cashflow makes up more than 20% of company valuation)
- Experienced mutual fund buying for two consecutive quarters

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.



We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.



Considering this information, which of these stocks are value plays--and which do you consider to be falling knives?

1. American Equity Investment Life Holding Co. (NYSE:AEL):
Life Insurance Industry. Market cap of $772.90M. Price/free cash flow at 1.63. On a net basis, mutual funds purchased 2.4M shares during the current quarter and 1.6M shares during the previous quarter. The stock is a short squeeze candidate, with a short float at 11.71% (equivalent to 12.44 days of average volume). The stock has gained 44.01% over the last year.

2. Symetra Financial Corporation (NYSE:SYA): Life Insurance Industry. Market cap of $1.59B. Price/free cash flow at 1.76. On a net basis, mutual funds purchased 705.8K shares during the current quarter and 49.4K shares during the previous quarter. The stock has gained 6.76% over the last year.

3. National Bank of Greece SA (NYSE:NBG):
Money Center Banks Industry. Market cap of $3.99B. Price/free cash flow at 1.79. On a net basis, mutual funds purchased 3.4M shares during the current quarter and 2.4M shares during the previous quarter. This is a risky stock that is significantly more volatile than the overall market (beta = 2.07). The stock has had a couple of great days, gaining 6.3% over the last week.

4. Barclays PLC (NYSE:BCS): Foreign Money Center Banks Industry. Market cap of $55.39B. Price/free cash flow at 1.81. On a net basis, mutual funds purchased 107.2K shares during the current quarter and 1.7M shares during the previous quarter. This is a risky stock that is significantly more volatile than the overall market (beta = 2.51). The stock has had a couple of great days, gaining 6.24% over the last week.

5. Morgan Stanley (NYSE:MS): Investment Brokerage ndustry. Market cap of $37.42B. Price/free cash flow at 2.45. On a net basis, mutual funds purchased 7.2M shares during the current quarter and 18.7M shares during the previous quarter. Might be undervalued at current levels, with a PEG ratio at 0.89, and P/FCF ratio at 2.45. The stock has lost 6.83% over the last year.

6. Huaneng Power International Inc. (NYSE:HNP):
Electric Utilities Industry. Market cap of $7.06B. Price/free cash flow at 2.54. On a net basis, mutual funds purchased 1.3M shares during the current quarter and 303.4K shares during the previous quarter. The stock has gained 16.22% over the last year.

7. Regions Financial Corp. (NYSE:RF): Regional Banks Industry. Market cap of $8.87B. Price/free cash flow at 2.58. On a net basis, mutual funds purchased 21.5M shares during the current quarter and 41.7M shares during the previous quarter. The stock has lost 3.81% over the last year.

8. CNO Financial Group, Inc. (NYSE:CNO): Accident & Health Insurance Industry. Market cap of $1.95B. Price/free cash flow at 2.75. On a net basis, mutual funds purchased 400.2K shares during the current quarter and 7.0M shares during the previous quarter. This is a risky stock that is significantly more volatile than the overall market (beta = 2.55). The stock is a short squeeze candidate, with a short float at 8.55% (equivalent to 9.63 days of average volume). The stock has gained 43.6% over the last year.

9. Flagstone Reinsurance Holdings SA (FSR): Property & Casualty Insurance Industry. Market cap of $612.24M. Price/free cash flow at 2.75. On a net basis, mutual funds purchased 343.2K shares during the current quarter and 29.4K shares during the previous quarter. The stock has lost 23.33% over the last year.

10. INTL FCStone Inc. (NASDAQ:INTL): Asset Management Industry. Market cap of $469.95M. Price/free cash flow at 2.77. On a net basis, mutual funds purchased 535.5K shares during the current quarter and 188.3K shares during the previous quarter. The stock has gained 62.07% over the last year.

11. Nara Bancorp Inc. (NARA): Pacific Banks Industry. Market cap of $322.62M. Price/free cash flow at 2.81. On a net basis, mutual funds purchased 255.5K shares during the current quarter and 484.0K shares during the previous quarter. The stock is a short squeeze candidate, with a short float at 11.27% (equivalent to 20.11 days of average volume). The stock has performed poorly over the last month, losing 13.72%.

12. Capstead Mortgage Corp. (NYSE:CMO):
Mortgage Investment Industry. Market cap of $1.03B. Price/free cash flow at 2.88. On a net basis, mutual funds purchased 1.2M shares during the current quarter and 1.4M shares during the previous quarter. The stock has gained 32.57% over the last year.

13. Susquehanna Bancshares, Inc. (NASDAQ:SUSQ):
Regional Banks Industry. Market cap of $1.13B. Price/free cash flow at 3.04. On a net basis, mutual funds purchased 196.6K shares during the current quarter and 2.9M shares during the previous quarter. The stock is a short squeeze candidate, with a short float at 10.39% (equivalent to 16.84 days of average volume).

14. Fifth Third Bancorp (NASDAQ:FITB): Regional Banks Industry. Market cap of $12.0B. Price/free cash flow at 3.17. On a net basis, mutual funds purchased 13.0M shares during the current quarter and 12.7M shares during the previous quarter. This is a risky stock that is significantly more volatile than the overall market (beta = 2.23). The stock has had a couple of great days, gaining 5.41% over the last week.

15. Glacier Bancorp Inc. (NASDAQ:GBCI):
Regional Banks Industry. Market cap of $1.02B. Price/free cash flow at 3.19. On a net basis, mutual funds purchased 1.2M shares during the current quarter and 676.4K shares during the previous quarter. The stock is a short squeeze candidate, with a short float at 10.14% (equivalent to 17.62 days of average volume). The stock has lost 4.63% over the last year.

16. Synovus Financial Corp. (NYSE:SNV): Regional Banks Industry. Market cap of $1.87B. Price/free cash flow at 3.2. On a net basis, mutual funds purchased 10.8M shares during the current quarter and 5.8M shares during the previous quarter. The stock is a short squeeze candidate, with a short float at 9.63% (equivalent to 8.76 days of average volume). The stock has lost 11.85% over the last year.

17. Discover Financial Services (NYSE:DFS): Credit Services Industry. Market cap of $13.0B. Price/free cash flow at 3.34. On a net basis, mutual funds purchased 876.3K shares during the current quarter and 7.7M shares during the previous quarter. The stock has gained 81.98% over the last year.

18. Wintrust Financial Corporation (NASDAQ:WTFC): Regional Banks Industry. Market cap of $1.14B. Price/free cash flow at 3.38. On a net basis, mutual funds purchased 625.0K shares during the current quarter and 924.0K shares during the previous quarter. The stock is a short squeeze candidate, with a short float at 16.61% (equivalent to 20.24 days of average volume). The stock has lost 7.55% over the last year.

19. Advance America, Cash Advance Centers Inc. (NYSE:AEA):
Credit Services Industry. Market cap of $383.27M. Price/free cash flow at 3.39. On a net basis, mutual funds purchased 581.0K shares during the current quarter and 79.8K shares during the previous quarter. This is a risky stock that is significantly more volatile than the overall market (beta = 3.02). Might be undervalued at current levels, with a PEG ratio at 0.63, and P/FCF ratio at 3.39. The stock has gained 44.03% over the last year.

20. Genworth Financial Inc. (NYSE:GNW):
Life Insurance Industry. Market cap of $5.45B. Price/free cash flow at 3.53. On a net basis, mutual funds purchased 21.8M shares during the current quarter and 1.3M shares during the previous quarter. This is a risky stock that is significantly more volatile than the overall market (beta = 3.13). The stock has lost 25.54% over the last year.

21. Webster Financial Corp. (NYSE:WBS): Regional Banks Industry. Market cap of $1.83B. Price/free cash flow at 3.54. On a net basis, mutual funds purchased 1.7M shares during the current quarter and 2.4M shares during the previous quarter. The stock is a short squeeze candidate, with a short float at 6.72% (equivalent to 11.98 days of average volume). The stock has gained 12.15% over the last year.

22. Mercer International Inc. (NASDAQ:MERC): Paper & Paper Products Industry. Market cap of $628.70M. Price/free cash flow at 3.59. On a net basis, mutual funds purchased 65.4K 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 = 3.27). Might be undervalued at current levels, with a PEG ratio at 0.88, and P/FCF ratio at 3.59. The stock has had a couple of great days, gaining 9.23% over the last week.

23. China Life Insurance Co. Ltd. (NYSE:LFC):
Life Insurance Industry. Market cap of $99.02B. Price/free cash flow at 3.6. On a net basis, mutual funds purchased 5.4K shares during the current quarter and 261.4K shares during the previous quarter. The stock has lost 16.52% over the last year.

24. Hartford Financial Services Group Inc. (NYSE:HIG):
Property & Casualty Insurance Industry. Market cap of $11.87B. Price/free cash flow at 3.73. On a net basis, mutual funds purchased 2.9M shares during the current quarter and 3.9M shares during the previous quarter. This is a risky stock that is significantly more volatile than the overall market (beta = 3.04). The stock has gained 10.4% over the last year.

25. Global Ship Lease, Inc. (NYSE:GSL):
Shipping Industry. Market cap of $311.42M. Price/free cash flow at 3.74. On a net basis, mutual funds purchased 49.1K shares during the current quarter and 10.3K shares during the previous quarter. It's been a rough couple of days for the stock, losing 5.46% over the last week.

26. Prudential Financial, Inc. (NYSE:PRU):
Life Insurance Industry. Market cap of $31.12B. Price/free cash flow at 3.78. On a net basis, mutual funds purchased 5.4M shares during the current quarter and 2.4M shares during the previous quarter. This is a risky stock that is significantly more volatile than the overall market (beta = 2.38). The stock has gained 12.45% over the last year.

27. Montpelier Re Holdings Ltd. (NYSE:MRH): Property & Casualty Insurance Industry. Market cap of $1.17B. Price/free cash flow at 3.86. On a net basis, mutual funds purchased 266.0K shares during the current quarter and 457.3K shares during the previous quarter. The stock has gained 27.96% over the last year.

28. State Auto Financial Corp. (NASDAQ:STFC): Property & Casualty Insurance Industry. Market cap of $671.10M. Price/free cash flow at 4.04. On a net basis, mutual funds purchased 21.6K shares during the current quarter and 121.6K shares during the previous quarter.

29. SkyWest Inc. (NASDAQ:SKYW):
Regional Airlines Industry. Market cap of $816.09M. Price/free cash flow at 4.25. On a net basis, mutual funds purchased 175.4K shares during the current quarter and 120.6K shares during the previous quarter. The stock is a short squeeze candidate, with a short float at 32.33% (equivalent to 6.05 days of average volume). The stock has gained 14.04% over the last year.

30. Boise Inc. (NYSE:BZ): Paper & Paper Products Industry. Market cap of $715.37M. Price/free cash flow at 4.4. On a net basis, mutual funds purchased 989.3K shares during the current quarter and 2.4M shares during the previous quarter. The stock has had a couple of great days, gaining 7.93% over the last week. The stock has performed poorly over the last month, losing 14.05%.

*Mutual fund data sourced from fidelity, P/FCF 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.

Source: Top 30 Stocks With Low P/FCF Ratios, With Mutual Fund Buying