3 Undervalued S&P 500 Stocks Seeing Bullish Changes In Options Sentiment

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 |  Includes: ETN, QEP, WY
by: Kapitall

If you like to follow the sentiment of options traders, you may be very interested in this list.

We ran a screen on stocks in the S&P 500 for those that appear undervalued to earnings growth, with PEG below 1. We screened these stocks for those with significant decreases in put/call over the last 10 trading days, indicating a bullish turn in sentiment from options traders.

‪Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the 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.

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Are you also bullish on these names? Use this list as a starting point for your own analysis.

List sorted by decrease in put/call ratio.

1. QEP Resources, Inc. (NYSE:QEP):
Operates as an independent natural gas and oil exploration and production company. Market cap of $4.85B. PEG at 0.70. Put/Call ratio changed from 0.34 to 0.07 between 09/26/11 to 10/07/11, a change of -79.41%. The stock has performed poorly over the last month, losing 20.38%.

2. Weyerhaeuser Co. (NYSE:WY): A forest product company, grows and harvests trees, builds homes and manufactures forest products worldwide. Market cap of $8.63B. PEG at 0.93. Put/Call ratio changed from 0.45 to 0.37 between 09/26/11 to 10/07/11, a change of -17.78%. Offers a good dividend, and appears to have good liquidity to back it up - dividend yield at 3.74%, current ratio at 2.12, and quick ratio at 1.63. The stock has gained 3.82% over the last year.

3. Eaton Corporation (NYSE:ETN):
Operates as a power management company worldwide. Market cap of $13.18B. PEG at 0.89. Put/Call ratio changed from 0.63 to 0.52 between 09/26/11 to 10/07/11, a change of -17.46%. Offers a good dividend, and appears to have good liquidity to back it up - dividend yield at 3.52%, current ratio at 1.74, and quick ratio at 1.22. The stock has had a couple of great days, gaining 8.82% over the last week.

*Options data sourced from Schaeffer’s, 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.