Do you like to search for stocks that could be oversold? If so, here are some ideas on how to start your search.

We began by screening for technically oversold stocks, with RSI(14) below 40. We then screened for those that also appear undervalued relative to their Graham Numbers, a measure of maximum fair value created by the "godfather of value investing" Benjamin Graham.

The number 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 market cap over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.*

Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.

** 1. Apache Corp. (NYSE:APA):** Operates as an independent energy company. RSI(14) at 37.9. Diluted TTM earnings per share at 11.46, and a MRQ book value per share value at 72.29, implies a Graham Number fair value = sqrt(22.5*11.46*72.29) = $136.53. Based on the stock's price at $101.76, this implies a potential upside of 34.17% from current levels.

** 2. Baker Hughes Incorporated (NYSE:BHI):** Supplies wellbore related products, and technology services and systems for drilling, formation evaluation, completion and production, and reservoir technology and consulting to the oil and natural gas industry worldwide. RSI(14) at 31.88. Diluted TTM earnings per share at 3.97, and a MRQ book value per share value at 36.03, implies a Graham Number fair value = sqrt(22.5*3.97*36.03) = $56.73. Based on the stock's price at $43.71, this implies a potential upside of 29.79% from current levels.

** 3. Peabody Energy Corp. (BTU):** Engages in the exploration, mining, and production of coal. RSI(14) at 36.51. Diluted TTM earnings per share at 3.52, and a MRQ book value per share value at 20.23, implies a Graham Number fair value = sqrt(22.5*3.52*20.23) = $40.03. Based on the stock's price at $30.19, this implies a potential upside of 32.59% from current levels.

** 4. Diamond Foods, Inc. (NASDAQ:DMND):** Engages in processing, marketing, and distributing snack products, as well as culinary, in-shell, and ingredient nuts. RSI(14) at 33.64. Diluted TTM earnings per share at 2.22, and a MRQ book value per share value at 20.63, implies a Graham Number fair value = sqrt(22.5*2.22*20.63) = $32.10. Based on the stock's price at $23.68, this implies a potential upside of 35.56% from current levels.

** 5. GrafTech International Ltd. (GTI):** Manufactures graphite and carbon material science-based solutions. RSI(14) at 35.32. Diluted TTM earnings per share at 1.05, and a MRQ book value per share value at 9.34, implies a Graham Number fair value = sqrt(22.5*1.05*9.34) = $14.85. Based on the stock's price at $11.78, this implies a potential upside of 26.1% from current levels.

** 6. Lexmark International Inc. (NYSE:LXK):** Develops, manufactures, and supplies printing and imaging solutions for offices. RSI(14) at 34.45. Diluted TTM earnings per share at 4.12, and a MRQ book value per share value at 19.49, implies a Graham Number fair value = sqrt(22.5*4.12*19.49) = $42.51. Based on the stock's price at $34.28, this implies a potential upside of 24% from current levels.

** 7. Murphy Oil Corporation (NYSE:MUR):** Engages in the exploration and production of oil and gas properties worldwide. RSI(14) at 37.56. Diluted TTM earnings per share at 4.49, and a MRQ book value per share value at 45.31, implies a Graham Number fair value = sqrt(22.5*4.49*45.31) = $67.66. Based on the stock's price at $57.17, this implies a potential upside of 18.34% from current levels.

** 8. PharMerica Corporation (NYSE:PMC):** Operates as an institutional pharmacy services company in the United States. RSI(14) at 39.43. Diluted TTM earnings per share at 0.79, and a MRQ book value per share value at 14.05, implies a Graham Number fair value = sqrt(22.5*0.79*14.05) = $15.80. Based on the stock's price at $12.38, this implies a potential upside of 27.65% from current levels.

** 9. Pepco Holdings, Inc. (NYSE:POM):** Engages in the transmission, distribution, and supply of electricity. RSI(14) at 35.15. Diluted TTM earnings per share at 1.14, and a MRQ book value per share value at 19.06, implies a Graham Number fair value = sqrt(22.5*1.14*19.06) = $22.11. Based on the stock's price at $18.88, this implies a potential upside of 17.11% from current levels.

** 10. Systemax Inc. (NYSE:SYX):** Operates as a direct marketer of brand name and private label products. RSI(14) at 39.42. Diluted TTM earnings per share at 1.47, and a MRQ book value per share value at 12.48, implies a Graham Number fair value = sqrt(22.5*1.47*12.48) = $20.32. Based on the stock's price at $16.98, this implies a potential upside of 19.65% from current levels.

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