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In the never-ending search for potentially undervalued stocks, one indicator is the ratio levered free cash flow/enterprise value. Companies with higher ratios appear more undervalued relative to their levered free cash flows.

Levered free cash flow is the free cash flow after deducting interest payments on outstanding debt. Enterprise value is the sum of the firm’s value from all ownership sources: market cap, outstanding debt, and preferred shares. From this value we subtract cash holdings because, in the event of a takeover, that cash would be used towards the takeover price.

We ran a screen on stocks exhibiting the technical signal “golden cross,” in which a stock’s 50-day moving average crosses above its 200-day moving average, for those that also appear undervalued by levered free cash flow/enterprise value.

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.

Do you think these stocks will continue moving higher? Use this list as a starting point for your own analysis.

List sorted by levered free cash flow/enterprise value.

1. Investors Title Co. (NASDAQ:ITIC): Provides title insurance, as well as tax-deferred real property exchange services in the United States. Market cap of $77.93M. SMA50 at $35.81 vs. SMA200 at $35.68 (current price at $36.76). Levered free cash flow/enterprise value at 30.35% (levered free cash flow at 12.63M and enterprise value at 41.62M). The stock has gained 20.52% over the last year.

2. Systemax Inc. (NYSE:SYX): Operates as a direct marketer of brand name and private label products. Market cap of $583.70M. SMA50 at $13.98 vs. SMA200 at $13.85 (current price at $16.04). Levered free cash flow/enterprise value at 25.89% (levered free cash flow at 117.77M and enterprise value at 454.87M). The stock is a short squeeze candidate, with a short float at 6.82% (equivalent to 19.98 days of average volume). The stock has had a couple of great days, gaining 8.31% over the last week.

3. American Financial Group Inc. (NYSE:AFG): Engages in property and casualty insurance business in the United States. Market cap of $3.61B. SMA50 at $34.53 vs. SMA200 at $33.95 (current price at $36.55). Levered free cash flow/enterprise value at 16.70% (levered free cash flow at 522.62M and enterprise value at 3.13B). The stock has gained 15.15% over the last year.

4. Force Protection Inc. (NASDAQ:FRPT): Engages in the design, manufacture, testing, delivery, and support of blast- and ballistic-protected vehicles. Market cap of $358.09M. SMA50 at $4.61 vs. SMA200 at $4.56 (current price at $5.51). Levered free cash flow/enterprise value at 16.53% (levered free cash flow at 38.93M and enterprise value at 235.53M). The stock has lost 2.65% over the last year.

5. Amerisafe, Inc. (NASDAQ:AMSF): Provides workers' compensation insurance focusing on small to mid-sized employers engaged in hazardous industries, principally construction, trucking, logging, oil and gas, maritime, sawmills, and agriculture in the United States and the U. Market cap of $424.28M. SMA50 at $21.75 vs. SMA200 at $21.48 (current price at $23.48). Levered free cash flow/enterprise value at 16.47% (levered free cash flow at 56.80M and enterprise value at 344.95M). The stock has gained 26.44% over the last year.

6. Movado Group, Inc. (NYSE:MOV): Designs, sources, markets, and distributes fine watches and jewelry. Market cap of $487.29M. SMA50 at $15.78 vs. SMA200 at $15.37 (current price at $19.57). Levered free cash flow/enterprise value at 16.44% (levered free cash flow at 55.37M and enterprise value at 336.82M). The stock has had a good month, gaining 26.83%.

7. Retalix Ltd. (NASDAQ:RTLX): Provides integrated software solutions to food and fuel retailers, grocery, convenience stores, and foodservice distributors primarily in Israel, the United States, and Europe. Market cap of $291.27M. SMA50 at $14.50 vs. SMA200 at $14.29 (current price at $14.96). Levered free cash flow/enterprise value at 13.42% (levered free cash flow at 30.06M and enterprise value at 223.97M). The stock has gained 7.24% over the last year.

8. Village Super Market Inc. (NASDAQ:VLGEA): Operates a chain of ShopRite supermarkets in the United States. Market cap of $403.27M. SMA50 at $27.66 vs. SMA200 at $26.75 (current price at $30.05). Levered free cash flow/enterprise value at 13.23% (levered free cash flow at 48.49M and enterprise value at 366.64M). The stock has lost 4.39% over the last year.

9. Cloud Peak Energy Inc. (NYSE:CLD): Engages in coal mining operations in the Powder River Basin of the United States. Market cap of $1.24B. SMA50 at $20.48 vs. SMA200 at $20.43 (current price at $20.40). Levered free cash flow/enterprise value at 12.70% (levered free cash flow at 213.44M and enterprise value at 1.68B). The stock has lost 10.99% over the last year.

10. Westwood Holdings Group Inc. (NYSE:WHG): Provides services for its clients. Market cap of $284.21M. SMA50 at $36.34 vs. SMA200 at $36.04 (current price at $36.91). Levered free cash flow/enterprise value at 11.97% (levered free cash flow at 24.35M and enterprise value at 203.45M). The stock has lost 0.7% over the last year.

11. Build-A-Bear Workshop Inc. (NYSE:BBW): Operates as a specialty retailer of plush animals and related products. Market cap of $152.43M. SMA50 at $6.67 vs. SMA200 at $6.23 (current price at $8.72). Levered free cash flow/enterprise value at 11.80% (levered free cash flow at 14.11M and enterprise value at 119.54M). The stock is a short squeeze candidate, with a short float at 11% (equivalent to 13.33 days of average volume). The stock has had a couple of great days, gaining 6.6% over the last week.

12. Fisher Communications Inc. (FSCI): Engages in television and radio broadcasting businesses. Market cap of $262.60M. SMA50 at $27.87 vs. SMA200 at $27.80 (current price at $29.74). Levered free cash flow/enterprise value at 11.31% (levered free cash flow at 34.08M and enterprise value at 301.34M). The stock has gained 41.35% over the last year.

13. Synopsys Inc. (NASDAQ:SNPS): Provides technology solutions used to develop electronics and electronic systems worldwide. Market cap of $4.04B. SMA50 at $26.56 vs. SMA200 at $26.04 (current price at $28.02). Levered free cash flow/enterprise value at 10.78% (levered free cash flow at 320.02M and enterprise value at 2.97B). The stock has gained 4.75% over the last year.

14. Merck & Co. Inc. (NYSE:MRK): Provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. Market cap of $108.75B. SMA50 at $33.82 vs. SMA200 at $33.54 (current price at $35.68). Levered free cash flow/enterprise value at 10.65% (levered free cash flow at 11.83B and enterprise value at 111.10B). Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 4.71%, current ratio at 2.06, and quick ratio at 1.68. The stock has gained 3.69% over the last year.

15. Friedman Industries Inc. (NYSEMKT:FRD): Engages in steel processing, pipe manufacturing and processing, and steel and pipe distribution activities in the United States. Market cap of $73.51M. SMA50 at $10.03 vs. SMA200 at $9.82 (current price at $10.81). Levered free cash flow/enterprise value at 10.21% (levered free cash flow at 5.55M and enterprise value at 54.35M). The stock has gained 29.77% over the last year.

16. KapStone Paper and Packaging Corporation (NYSE:KS): Engages in the production and sale of unbleached kraft, linerboard, saturating kraft, and unbleached folding carton boards primarily in the Americas, Europe, and Asia. Market cap of $765.60M. SMA50 at $16.06 vs. SMA200 at $15.75 (current price at $16.50). Levered free cash flow/enterprise value at 10.08% (levered free cash flow at 78.11M and enterprise value at 774.89M). The stock has gained 11.34% over the last year.

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

Source: 16 Golden Cross Stocks Undervalued By Levered Free Cash Flow