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Do you consider yourself a value investor? If so, here are some investing ideas you might find interesting.

We ran a screen on stocks that have seen significant net insider purchases over the last six months, indicating company insiders believe their companies will outperform. We then screened these companies for those trading at steep discounts to their Graham number, possibly indicating that they are undervalued.

The Graham number was created by the "godfather of value investing" Benjamin Graham, and calculates a stock's maximum fair value based off of its EPS and book value per share (BVPS). Stocks trading below their Graham Number may be undervalued.

Graham Number = SQRT(22.5 x TTM EPS x MRQ BVPS)

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 are being underestimated by the market? Use this list as a starting point for your own analysis.

List sorted by net insider purchases as a percent of share float.

1. Jefferies Group, Inc. (JEF): Operates as a securities and investment banking company in the Americas, Europe, and Asia. Market cap of $2.78B. Net insider shares purchased over the last six months at 1.50M, which is 0.70% of the company's 213.41M share float. TTM Diluted EPS at $1.28, MRQ Book Value Per Share at $14.40, Graham number at $20.36 (vs. current price at $16.11, implies a potential upside of 26.41%). The stock has had a good month, gaining 16.13%.

2. BancFirst Corporation (NASDAQ:BANF): Operates as the holding company for BancFirst that provides commercial banking services to retail customers and small to medium-sized businesses in the non-metropolitan trade centers of Oklahoma and the metropolitan markets of Oklahoma City, Tulsa, Lawton, Muskogee, Norman, and Shawnee. Market cap of $596.88M. Net insider shares purchased over the last six months at 33.04K, which is 0.55% of the company's 5.97M share float. TTM Diluted EPS at $2.93, MRQ Book Value Per Share at $31.36, Graham number at $45.47 (vs. current price at $39.50, implies a potential upside of 15.11%). The stock is a short squeeze candidate, with a short float at 6.58% (equivalent to 24.16 days of average volume). The stock has lost 4.39% over the last year.

3. Pacific Capital Bancorp (NASDAQ:PCBC): Provides a range of commercial and consumer banking services to households, professionals, and businesses primarily in the central coast of California. Market cap of $917.53M. Net insider shares purchased over the last six months at 20.04K, which is 0.49% of the company's 4.08M share float. TTM Diluted EPS at $2.33, MRQ Book Value Per Share at $22.64, Graham number at $34.45 (vs. current price at $29.09, implies a potential upside of 18.43%). The stock is a short squeeze candidate, with a short float at 14.36% (equivalent to 30.16 days of average volume). The stock has lost 0.68% over the last year.

4. Winthrop Realty Trust (NYSE:FUR): Engages in the ownership and management of real property and real estate-related assets. Market cap of $375.66M. Net insider shares purchased over the last six months at 119.34K, which is 0.41% of the company's 29.24M share float. TTM Diluted EPS at $0.82, MRQ Book Value Per Share at $11.07, Graham number at $14.29 (vs. current price at $11.11, implies a potential upside of 28.63%). The stock has lost 4.85% over the last year.

5. Community Trust Bancorp Inc. (NASDAQ:CTBI): Operates as the holding company for Community Trust Bank, Inc. Market cap of $470.31M. Net insider shares purchased over the last six months at 43.74K, which is 0.34% of the company's 12.71M share float. TTM Diluted EPS at $2.53, MRQ Book Value Per Share at $23.93, Graham number at $36.91 (vs. current price at $30.72, implies a potential upside of 20.14%). The stock has gained 5.72% over the last year.

6. Ellington Financial LLC (NYSE:EFC): Mortgage Investment Industry. Market cap of $320.12M. Net insider shares purchased over the last six months at 34.37K, which is 0.24% of the company's 14.07M share float. TTM Diluted EPS at $1.31, MRQ Book Value Per Share at $22.84, Graham number at $25.95 (vs. current price at $19.38, implies a potential upside of 33.88%). The stock has had a good month, gaining 13.47%.

7. LB Foster Co. (NASDAQ:FSTR): Basic Materials Wholesale Industry. Market cap of $301.80M. Net insider shares purchased over the last six months at 22.70K, which is 0.24% of the company's 9.52M share float. TTM Diluted EPS at $2.22, MRQ Book Value Per Share at $26.43, Graham number at $36.33 (vs. current price at $29.98, implies a potential upside of 21.19%). The stock has lost 28.57% over the last year.

8. SeaCube Container Leasing Ltd. (NYSE:BOX-OLD): Operates as a container leasing company worldwide. Market cap of $304.62M. Net insider shares purchased over the last six months at 25.75K, which is 0.23% of the company's 10.98M share float. TTM Diluted EPS at $1.88, MRQ Book Value Per Share at $10.29, Graham number at $20.86 (vs. current price at $14.96, implies a potential upside of 39.46%). The stock has gained 19.07% over the last year.

9. G-III Apparel Group, Ltd. (NASDAQ:GIII): Designs, manufactures, imports, and markets a range of outerwear and sportswear apparel to retailers primarily in the United States. Market cap of $478.04M. Net insider shares purchased over the last six months at 20.0K, which is 0.15% of the company's 13.71M share float. TTM Diluted EPS at $2.83, MRQ Book Value Per Share at $17.80, Graham number at $33.67 (vs. current price at $25.22, implies a potential upside of 33.49%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.45). The stock is a short squeeze candidate, with a short float at 10.73% (equivalent to 6.02 days of average volume). The stock has had a couple of great days, gaining 6.29% over the last week.

10. Sunstone Hotel Investors Inc. (NYSE:SHO): Operates as a real estate investment trust. Market cap of $1.11B. Net insider shares purchased over the last six months at 115.0K, which is 0.11% of the company's 100.23M share float. TTM Diluted EPS at $0.73, MRQ Book Value Per Share at $8.32, Graham number at $11.69 (vs. current price at $9.35, implies a potential upside of 25.03%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.79). The stock has had a couple of great days, gaining 6.64% over the last week.

11. R.R. Donnelley & Sons Company (NASDAQ:RRD): Provides pre-media, printing, logistics, and business process outsourcing products and services to private and public sectors worldwide. Market cap of $2.16B. Net insider shares purchased over the last six months at 206.20K, which is 0.11% of the company's 186.21M share float. TTM Diluted EPS at $1.14, MRQ Book Value Per Share at $9.61, Graham number at $15.70 (vs. current price at $11.84, implies a potential upside of 32.60%). Might be undervalued at current levels, with a PEG ratio at 0.89, and P/FCF ratio at 8.49. The stock is a short squeeze candidate, with a short float at 14.92% (equivalent to 7.94 days of average volume). The stock has performed poorly over the last month, losing 20.55%.

12. TriQuint Semiconductor, Inc. (NASDAQ:TQNT): Supplies modules, components, and foundry services to communications companies worldwide. Market cap of $995.72M. Net insider shares purchased over the last six months at 152.33K, which is 0.09% of the company's 165.19M share float. TTM Diluted EPS at $0.50, MRQ Book Value Per Share at $5.59, Graham number at $7.93 (vs. current price at $6.01, implies a potential upside of 31.95%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.07). The stock has recently rebounded, and is currently trading 11.67% above its SMA20 and 22.3% above its SMA50. However, the stock still trades 24.51% below its SMA200. The stock has had a good month, gaining 20.77%.

13. State Bank Financial Corporation (NASDAQ:STBZ): Operates as the holding company for State Bank and Trust Company that provides community banking services to individuals and businesses in the middle Georgia and metropolitan Atlanta areas. Market cap of $505.76M. Net insider shares purchased over the last six months at 11.62K, which is 0.08% of the company's 15.41M share float. TTM Diluted EPS at $1.43, MRQ Book Value Per Share at $12.31, Graham number at $19.90 (vs. current price at $16.08, implies a potential upside of 23.77%).

14. Horsehead Holding Corp. (NASDAQ:ZINC): Produces and sells specialty zinc and zinc-based products in North America. Market cap of $492.94M. Net insider shares purchased over the last six months at 34.60K, which is 0.08% of the company's 43.14M share float. TTM Diluted EPS at $1.11, MRQ Book Value Per Share at $9.60, Graham number at $15.48 (vs. current price at $11.42, implies a potential upside of 35.59%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.49). The stock is a short squeeze candidate, with a short float at 8.45% (equivalent to 8.47 days of average volume). The stock has had a good month, gaining 21.16%.

15. Interactive Brokers Group, Inc. (NASDAQ:IBKR): Operates as an automated global electronic market maker and broker. Market cap of $697.22M. Net insider shares purchased over the last six months at 30.0K, which is 0.07% of the company's 43.88M share float. TTM Diluted EPS at $1.40, MRQ Book Value Per Share at $12.59, Graham number at $19.91 (vs. current price at $15.52, implies a potential upside of 28.31%). The stock has lost 6.54% over the last year.

16. Atlas Air Worldwide Holdings Inc. (NASDAQ:AAWW): Provides air cargo and outsourced aircraft operating solutions worldwide. Market cap of $1.23B. Net insider shares purchased over the last six months at 15.0K, which is 0.06% of the company's 25.90M share float. TTM Diluted EPS at $3.95, MRQ Book Value Per Share at $41.91, Graham number at $61.03 (vs. current price at $44.55, implies a potential upside of 36.99%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.42). The stock has had a couple of great days, gaining 8.39% over the last week.

17. Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI): Operates as a commercial real estate finance company in the United States. Market cap of $306.14M. Net insider shares purchased over the last six months at 10.0K, which is 0.05% of the company's 19.09M share float. TTM Diluted EPS at $1.16, MRQ Book Value Per Share at $16.34, Graham number at $20.65 (vs. current price at $14.92, implies a potential upside of 38.41%). The stock has had a good month, gaining 11.04%.

*BVPS and EPS data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 17 Insider Stock Picks Undervalued By Graham