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With the recent selling dragging down share prices, everyone's looking for potentially undervalued stocks.

That said, there are plenty of falling knives out there. But spotting them is easier said than done.

To help you find ideas, we had a look at institutional trading data, and identified a list of potentially undervalued stocks that have seen big outflows from money managers.

All of the stocks mentioned below have low PEG values, i.e. they appear to be undervalued relative to projected earnings growth.

However, institutional investors think there's more downside to these names--do you agree? Use this list as a starting point for your own analysis.

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.

List sorted by relative size of institutional selling.

1. Bally Technologies, Inc. (BYI): Application Software Industry. Market cap of $1.59B. PEG at 0.75. Net institutional shares sold over the current quarter at 9.2M, which is 19.78% of the company's 46.50M share float. The stock is a short squeeze candidate, with a short float at 9.61% (equivalent to 7.16 days of average volume).

2. Ambow Education Holding Ltd. (AMBO): Education & Training Services Industry. Market cap of $406.30M. PEG at 0.62. Net institutional shares sold over the current quarter at 1.8M, which is 17.53% of the company's 10.27M share float. The stock has had a couple of great days, gaining 7.55% over the last week. The stock has performed poorly over the last month, losing 10.09%.

3. Harbin Electric, Inc. (HRBN): Industrial Electrical Equipment Industry. Market cap of $537.45M. PEG at 0.61. Net institutional shares sold over the current quarter at 3.0M, which is 17.02% of the company's 17.63M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.07).

4. Neutral Tandem, Inc. (TNDM): Wireless Communications Industry. Market cap of $339.23M. PEG at 0.68. Net institutional shares sold over the current quarter at 3.0M, which is 10.08% of the company's 29.77M share float. The stock is a short squeeze candidate, with a short float at 6.27% (equivalent to 5.87 days of average volume).

5. Torchmark Corp. (TMK): Life Insurance Industry. Market cap of $3.82B. PEG at 0.88. Net institutional shares sold over the current quarter at 9.8M, which is 9.48% of the company's 103.42M share float. The stock has gained 13.35% over the last year.

6. Janus Capital Group, Inc. (JNS): Asset Management Industry. Market cap of $1.23B. PEG at 0.86. Net institutional shares sold over the current quarter at 16.5M, which is 9.16% of the company's 180.04M share float. The stock has had a couple of great days, gaining 8.57% over the last week. The stock has performed poorly over the last month, losing 21.36%.

7. Companhia Brasileira de Distribuicao (CBD): Grocery Stores Industry. Market cap of $9.73B. PEG at 0.69. Net institutional shares sold over the current quarter at 6.4M, which is 7.60% of the company's 84.17M share float.

8. Plexus Corp. (PLXS): Printed Circuit Boards Industry. Market cap of $845.01M. PEG at 0.86. Net institutional shares sold over the current quarter at 2.4M, which is 6.84% of the company's 35.07M share float. The stock is a short squeeze candidate, with a short float at 7.5% (equivalent to 6.63 days of average volume). The stock has performed poorly over the last month, losing 17.67%.

9. Schweitzer-Mauduit International Inc. (SWM): Paper & Paper Products Industry. Market cap of $909.25M. PEG at 0.79. Net institutional shares sold over the current quarter at 847.5K, which is 5.42% of the company's 15.65M share float. The stock is a short squeeze candidate, with a short float at 5.82% (equivalent to 5.05 days of average volume). The stock has had a couple of great days, gaining 6.03% over the last week.

10. AMERIGROUP Corporation (AGP): Health Care Plans Industry. Market cap of $2.24B. PEG at 0.66. Net institutional shares sold over the current quarter at 2.6M, which is 5.37% of the company's 48.46M share float. The stock has performed poorly over the last month, losing 32.18%.

*Institutional data sourced from Fidelity, all other data sourced from Finviz.

Source: Undervalued Or Value Traps? Smart Money Sees More Downside To These Names