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Do you like to search for stocks that might be trading below their fair value? For ideas on how to start your search, we ran a screen you may be interested in.

We screened the healthcare sector for stocks that appear undervalued, trading at significant discounts to their Graham Number.

The Graham Number was created by the "godfather of value investing" Benjamin Graham as a calculation for maximum fair value. It is based off of a stock's EPS and book value per share (BVPS).

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

The equation assumes that P/E should not be higher than 15 and P/BV should not be higher than 1.5. Stocks trading well below their Graham Number may be undervalued.

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 should be trading higher? Use this list as a starting point for your own analysis.

1. Aetna Inc. (NYSE:AET): Operates as a diversified health care benefits company in the United States. Diluted TTM earnings per share at 5.22, and a MRQ book value per share value at 29.06, implies a Graham Number fair value = sqrt(22.5*5.22*29.06) = $58.42. Based on the stock's price at $47.08, this implies a potential upside of 24.09% from current levels.

2. Boston Scientific Corporation (NYSE:BSX): Develops, manufactures, and markets medical devices used in various interventional medical specialties worldwide. Diluted TTM earnings per share at 0.29, and a MRQ book value per share value at 7.84, implies a Graham Number fair value = sqrt(22.5*0.29*7.84) = $7.15. Based on the stock's price at $6.09, this implies a potential upside of 17.44% from current levels.

3. CIGNA Corporation (NYSE:CI): Operates as a health service organization. Diluted TTM earnings per share at 5.5, and a MRQ book value per share value at 28.71, implies a Graham Number fair value = sqrt(22.5*5.5*28.71) = $59.61. Based on the stock's price at $44.93, this implies a potential upside of 32.66% from current levels.

4. Forest Laboratories Inc. (NYSE:FRX): Develops, manufactures, and sells branded and generic forms of ethical drug products. Diluted TTM earnings per share at 3.97, and a MRQ book value per share value at 20.55, implies a Graham Number fair value = sqrt(22.5*3.97*20.55) = $42.84. Based on the stock's price at $32.03, this implies a potential upside of 33.76% from current levels.

5. Teleflex Incorporated (NYSE:TFX): Develops, manufactures, and supplies single-use medical devices used by hospitals and healthcare providers worldwide. Diluted TTM earnings per share at 5.83, and a MRQ book value per share value at 47.46, implies a Graham Number fair value = sqrt(22.5*5.83*47.46) = $78.90. Based on the stock's price at $62.93, this implies a potential upside of 25.38% from current levels.

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

Source: For Your Watch List: 5 Healthcare Stocks Undervalued By The Graham Number