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One way to add substance to technical trades is by considering the company’s free cash flow as a measure of operational health. Companies producing large amounts of cash relative to their market cap may be undervalued.

Here we use levered free cash flow, the free cash flow available to common shareholders after paying interest on outstanding debt. When the ratio of levered free cash flow to market cap is high, it may indicate that the price is too low. At the very least, it indicates that the company is producing a lot of cash.

We began our screen by searching for highly oversold stocks, with RSI(14) below 30. Among these oversold stocks, we then found those that had high amounts of levered free cash flow relative to market cap.

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.

Do you think these stocks are undervalued? 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. Sony Corporation (SNE): Electronic Equipment Industry. Market cap of $25.88B. RSI(14) at 27.35. TTM levered free cash flow at $9.36B, which is 36.17% of market cap. The stock is currently stuck in a downtrend, trading 7.64% below its SMA20, 12.73% below its SMA50, and 22.05% below its SMA200. The stock has lost 8.94% over the last year.

2. PartnerRe Ltd. (PRE): Property & Casualty Insurance Industry. Market cap of $4.92B. RSI(14) at 26.86. TTM levered free cash flow at $1.20B, which is 24.39% of market cap. The stock has gained 6.05% over the last year.

3. DreamWorks Animation SKG Inc. (DWA): Movie Production, Theaters Industry. Market cap of $1.87B. RSI(14) at 25.36. TTM levered free cash flow at $393.94M, which is 21.09% of market cap. The stock is a short squeeze candidate, with a short float at 9.45% (equivalent to 6.19 days of average volume). It's been a rough couple of days for the stock, losing 9.91% over the last week.

4. Nokia Corporation (NOK): Communication Equipment Industry. Market cap of $25.07B. RSI(14) at 20.06. TTM levered free cash flow at $4.84B, which is 19.30% of market cap. The stock is currently stuck in a downtrend, trading 17.91% below its SMA20, 19.79% below its SMA50, and 27.53% below its SMA200. It's been a rough couple of days for the stock, losing 19.51% over the last week.

5. Ameriprise Financial Inc. (AMP): Asset Management Industry. Market cap of $13.79B. RSI(14) at 29.52. TTM levered free cash flow at $2.53B, which is 18.35% of market cap. It's been a rough couple of days for the stock, losing 5.71% over the last week.

6. Pitney Bowes Inc. (PBI): Business Equipment Industry. Market cap of $4.72B. RSI(14) at 28.55. TTM levered free cash flow at $817.07M, which is 17.30% of market cap. The stock is a short squeeze candidate, with a short float at 10.53% (equivalent to 9.57 days of average volume). The stock has gained 14.99% over the last year.

7. Textron Inc. (TXT): Conglomerates Industry. Market cap of $6.05B. RSI(14) at 25.08. TTM levered free cash flow at $952.88M, which is 15.74% of market cap. This is a risky stock that is significantly more volatile than the overall market (beta = 2.74). The stock is a short squeeze candidate, with a short float at 7.59% (equivalent to 5.3 days of average volume). The stock has performed poorly over the last month, losing 11.45%.

8. Safeway Inc. (SWY): Grocery Stores Industry. Market cap of $7.79B. RSI(14) at 28.85. TTM levered free cash flow at $1.21B, which is 15.53% of market cap. The stock is a short squeeze candidate, with a short float at 8.77% (equivalent to 5.59 days of average volume). It's been a rough couple of days for the stock, losing 10.24% over the last week.

9. AFLAC Inc. (AFL): Accident & Health Insurance Industry. Market cap of $21.30B. RSI(14) at 19.99. TTM levered free cash flow at $3.09B, which is 14.50% of market cap. The stock might be undervalued at current levels, with a PEG ratio at 0.78, and P/FCF ratio at 2.9. It's been a rough couple of days for the stock, losing 5.1% over the last week.

10. Lender Processing Services, Inc. (LPS): Business Services Industry. Market cap of $2.16B. RSI(14) at 29.35. TTM levered free cash flow at $279.92M, which is 12.96% of market cap. Might be undervalued at current levels, with a PEG ratio at 0.87, and P/FCF ratio at 6.89. The stock has performed poorly over the last month, losing 10.93%.

11. Lexmark International Inc. (LXK): Computer Based Systems Industry. Market cap of $2.20B. RSI(14) at 27.48. TTM levered free cash flow at $282.92M, which is 12.83% of market cap. The stock is currently stuck in a downtrend, trading 6.46% below its SMA20, 15.95% below its SMA50, and 25.24% below its SMA200. It's been a rough couple of days for the stock, losing 6.01% over the last week.

12. Janus Capital Group, Inc. (JNS): Asset Management Industry. Market cap of $1.73B. RSI(14) at 22.87. TTM levered free cash flow at $213.39M, which is 12.31% of market cap. This is a risky stock that is significantly more volatile than the overall market (beta = 2.67). The stock is currently stuck in a downtrend, trading 10.91% below its SMA20, 19.22% below its SMA50, and 20.81% below its SMA200. It's been a rough couple of days for the stock, losing 9.35% over the last week.

13. Partner Communications Company Ltd. (PTNR): Wireless Communications Industry. Market cap of $2.53B. RSI(14) at 23.04. TTM levered free cash flow at $301.60M, which is 11.93% of market cap. The stock is currently stuck in a downtrend, trading 7.9% below its SMA20, 11.38% below its SMA50, and 11.66% below its SMA200. The stock has performed poorly over the last month, losing 13.48%.

14. Lamar Advertising Co. (LAMR): Marketing Services Industry. Market cap of $2.55B. RSI(14) at 24.28. TTM levered free cash flow at $289.32M, which is 11.33% of market cap. This is a risky stock that is significantly more volatile than the overall market (beta = 2.67). The stock is currently stuck in a downtrend, trading 6.24% below its SMA20, 13.67% below its SMA50, and 20.54% below its SMA200. It's been a rough couple of days for the stock, losing 5.17% over the last week.

15. Bally Technologies, Inc. (BYI): Gaming Activities Industry. Market cap of $1.98B. RSI(14) at 27.34. TTM levered free cash flow at $206.08M, which is 10.43% of market cap. The stock is a short squeeze candidate, with a short float at 15.81% (equivalent to 8.85 days of average volume). The stock has lost 1.82% over the last year.

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

Source: 16 Oversold Stocks With High Levered Free Cash Flow