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We're now in the middle of earnings season and many companies have yet to post their fourth-quarter results. Next week alone over 500 companies are reporting their earnings. Do you have a watch list prepared?

We ran a screen on next week's reporting companies for those that appear undervalued relative to earnings growth, with PEG below 1. We then screened for companies with strong net institutional purchases over the current quarter, indicating institutional investors such as hedge fund managers believe these names will outperform.

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 companies will report positive earnings surprises? Use this list as a starting point for your own analysis.

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

1. USANA Health Sciences Inc. (NYSE:USNA): Develops, manufactures, distributes, and sells nutritional and personal care products worldwide. PEG at 0.69. Earnings to be reported on 02/07. Net institutional purchases in the current quarter at 693.3K shares, which represents about 10.24% of the company's float of 6.77M shares.

2. Sohu.com Inc. (NASDAQ:SOHU): Engages in the brand advertising, online gaming, sponsored search, and wireless businesses in China. PEG at 0.79. Earnings to be reported on 02/06. Net institutional purchases in the current quarter at 2.3M shares, which represents about 7.71% of the company's float of 29.82M shares.

3. Encore Capital Group, Inc. (NASDAQ:ECPG): Engages in consumer debt buying and recovery business. PEG at 0.72. Earnings to be reported on 02/09. Net institutional purchases in the current quarter at 933.9K shares, which represents about 7.57% of the company's float of 12.33M shares.

4. Globecomm Systems Inc. (NASDAQ:GCOM): Provides satellite-based communications infrastructure solutions and services. PEG at 0.94. Earnings to be reported on 02/06. Net institutional purchases in the current quarter at 1.2M shares, which represents about 5.86% of the company's float of 20.48M shares.

5. Spirit AeroSystems Holdings Inc (NYSE:SPR): Designs, engineers, and manufactures commercial aircraft structures worldwide. PEG at 0.82. Earnings to be reported on 02/09. Net institutional purchases in the current quarter at 4.7M shares, which represents about 5.12% of the company's float of 91.83M shares.

6. Nanometrics Incorporated (NASDAQ:NANO): Provides high-performance process control metrology systems used primarily in the fabrication of semiconductors, high-brightness LEDs, data storage devices, and solar photovoltaics. PEG at 0.56. Earnings to be reported on 02/08. Net institutional purchases in the current quarter at 845.0K shares, which represents about 4.49% of the company's float of 18.81M shares.

7. IntercontinentalExchange, Inc. (NYSE:ICE): Operates regulated futures exchanges, clearing houses, and over-the-counter markets for commodities and derivative financial products. PEG at 0.98. Earnings to be reported on 02/08. Net institutional purchases in the current quarter at 2.2M shares, which represents about 3.12% of the company's float of 70.55M shares.

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

Source: 7 Undervalued Stocks Reporting Earnings Next Week With Strong Hedge Fund Buying