Do you seek out potentially undervalued and underestimated stocks? For ideas on how to start your own value search, we ran a screen.
We began by screening for stocks that appear undervalued relative to earnings growth, with PEG below 1, and relative to free cash flow, with P/FCF below 15.
We then screened these names for those with the confidence of their company insiders, such as members of the board and upper management, with significant net insider purchases over the last six months representing at least 2% of share float. Since most companies only have a handful of company insiders, net insider purchases representing 2% of share float is a big show of confidence in their employer's prospects.
Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.
List sorted by net insider purchases over the last six months as a percent of share float.
1. China Biologic Products, Inc. (CBPO): Engages in the research, development, manufacturing, and sale of plasma-based pharmaceutical products. Market cap at $204.8M, most recent closing price at $8.0. PEG at 0.99. P/FCF at 6.81. Over the last six months, insiders were net buyers of 795,860 shares, which represents about 11.5% of the company's 6.92M share float.
2. Yongye International, Inc. (YONG): Engages in the research, development, manufacture, and sale of fulvic acid based liquid and powder nutrient compounds for plants and animals, which are used in the agriculture industry in the People's Republic of China. Market cap at $147.58M, most recent closing price at $2.92. PEG at 0.17. P/FCF at 7.04. Over the last six months, insiders were net buyers of 2,128,040 shares, which represents about 5.63% of the company's 37.79M share float.
3. Kraton Performance Polymers Inc. (KRA): Produces styrenic block copolymers for use in industrial and consumer applications worldwide. Market cap at $647.38M, most recent closing price at $20.08. PEG at 0.79. P/FCF at 6.06. Over the last six months, insiders were net buyers of 957,100 shares, which represents about 3.49% of the company's 27.46M share float.
*Insider 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.