Do you like to search for potentially undervalued stocks? For a closer look at stocks that appear undervalued but having bullish smart money sentiment, we ran a screen.
We began by screening for highly undervalued stocks - those that appear undervalued relative to earnings growth, with PEG below 1, and undervalued relative to free cash flows, with P/FCF below 15.
We then screened for those with bullish sentiment from short sellers, with significant decreases in shares shorted month-over-month representing at least 2% of share float. This indicates that short sellers are less bearish on these names than they were a month ago.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the 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.
List sorted by decrease in shares shorted month-over-month as a percent of share float.
1. Actuant Corporation (ATU): Manufactures and markets industrial products and systems worldwide. Market cap at $1.71B, most recent closing price at $24.87. PEG at 0.9. P/FCF at 9.78. Shares shorted have decreased from 7.44M to 5.53M over the last month, a decrease which represents about 3.05% of the company's float of 62.68M shares. Days to cover ratio at 8.43 days.
2. Vonage Holdings Corporation (VG): Provides voice and messaging services over broadband networks to residential, small office, and home office customers primarily in the United States, Canada, and the United Kingdom. Market cap at $384.81M, most recent closing price at $1.69. PEG at 0.2. P/FCF at 3.94. Shares shorted have decreased from 12.46M to 7.68M over the last month, a decrease which represents about 2.85% of the company's float of 167.84M shares. Days to cover ratio at 3.67 days.
3. Pan American Silver Corp. (PAAS): Engages in the exploration, development, extraction, processing, production, refining, reclamation, and operation of silver properties. Market cap at $1.6B, most recent closing price at $15.57. PEG at 0.41. P/FCF at 7.09. Shares shorted have decreased from 4.52M to 1.75M over the last month, a decrease which represents about 2.7% of the company's float of 102.51M shares. Days to cover ratio at 0.88 days.
*Short 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.