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Do you consider yourself a contrarian? If you like to go against the crowd or second-guess market rallies, your answer might be yes.

With a contrarian perspective, we ran a screen on the small-cap sector for names that may be underestimated. We began by screening for small-caps, with market caps between $300m and $2b, for those that are being highly shorted, with float shorts above 15%.

We then screened these names for those that 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.

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 market cap over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

Do you think these stocks offer contrarian opportunities for a turnaround? Use this list as a starting point for your own analysis.

List sorted by potential upside implied by Graham Number.

1. hhgregg, Inc. (HGG): Operates as a specialty retailer of consumer electronics, home appliances, and related services. Market cap at $395.86M. Price at $10.93. Float short at 33.26%. Diluted TTM earnings per share at 1.08, and a MRQ book value per share value at 8.49, implies a Graham Number fair value = sqrt(22.5*1.08*8.49) = $14.36. Based on the stock's price at $10.50, this implies a potential upside of 36.79% from current levels.

2. Veeco Instruments Inc. (VECO): Designs, manufactures, and markets equipment to make high brightness light emitting diodes, solar panels, hard-disk drives, and other devices. Market cap at $1.07B. Price at $28.68. Float short at 23.87%. Diluted TTM earnings per share at 3.11, and a MRQ book value per share value at 19.62, implies a Graham Number fair value = sqrt(22.5*3.11*19.62) = $37.05. Based on the stock's price at $28.30, this implies a potential upside of 30.93% from current levels.

3. Brown Shoe Co. Inc. (BWS): Operates as a footwear retailer and wholesaler primarily in the in the United States, Canada, China, and Guam. Market cap at $380.42M. Price at $9.29. Float short at 18.23%. Diluted TTM earnings per share at 0.56, and a MRQ book value per share value at 9.83, implies a Graham Number fair value = sqrt(22.5*0.56*9.83) = $11.13. Based on the stock's price at $8.61, this implies a potential upside of 29.26% from current levels.

4. Corinthian Colleges Inc. (COCO): Operates as a post-secondary career education company in the United States and Canada. Market cap at $309.00M. Price at $3.72. Float short at 19.77%. Diluted TTM earnings per share at 0.15, and a MRQ book value per share value at 6.64, implies a Graham Number fair value = sqrt(22.5*0.15*6.64) = $4.73. Based on the stock's price at $3.71, this implies a potential upside of 27.6% from current levels.

5. AmTrust Financial Services, Inc. (AFSI): Operates as a multinational specialty property and casualty insurance company in the United States and internationally. Market cap at $1.58B. Price at $26.53. Float short at 20.37%. Diluted TTM earnings per share at 2.77, and a MRQ book value per share value at 14.82, implies a Graham Number fair value = sqrt(22.5*2.77*14.82) = $30.39. Based on the stock's price at $26.32, this implies a potential upside of 15.47% from current levels.

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

Source: 5 Highly Shorted Small Caps Undervalued By The Graham Number