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Do you worry about stock market volatility? One idea is to consider a stock's recent trading volatility. With that idea in mind, we ran a screen.

We began by screening the healthcare sector for stocks with low trading volatility over the last month, with average intra-day volatility under 2%. That is, these stocks have traded within a +/- 2% range on average over the last month.

Then we screened to find those that also appear undervalued relative to the Graham Number, a measure of a stock's maximum fair value created by the "godfather of value investing" Benjamin Graham.

The Graham 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 stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

Do you think these stocks have more value to price in? Use this list as a starting point for your own analysis.

List sorted by potential upside implied by the Graham Number.

1. Lifepoint Hospitals Inc. (LPNT): Operates general acute care hospitals in non-urban communities in the United States. Market cap at $1.86B. Price at $39.46. Average intra-day volatility over the last month at 1.82%. Diluted TTM earnings per share at 3.22, and a MRQ book value per share value at 40.27, implies a Graham Number fair value = sqrt(22.5*3.22*40.27) = $54.01. Based on the stock's price at $39.19, this implies a potential upside of 37.83% from current levels.

2. Forest Laboratories Inc. (FRX): Develops, manufactures and sells branded and generic forms of ethical drug products. Market cap at $8.91B. Price at $33.76. Average intra-day volatility over the last month at 1.22%. 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 $34.61, this implies a potential upside of 23.79% from current levels.

3. CIGNA Corporation (CI): Operates as a health service organization. Market cap at $13.67B. Price at $48.28. Average intra-day volatility over the last month at 1.83%. Diluted TTM earnings per share at 4.84, and a MRQ book value per share value at 29.22, implies a Graham Number fair value = sqrt(22.5*4.84*29.22) = $56.41. Based on the stock's price at $48.99, this implies a potential upside of 15.15% from current levels.

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

Source: 3 Low Risk Healthcare Stocks Undervalued By The Graham Number