12 Undervalued Small-Caps Being Bought Up By Hedge Funds

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Includes: AAWW, APEI, BCOR, CJES, FCN, GAME, HELE, HGG, HOLI, MGAM, SNX, SUNH
by: Kapitall

Do you consider yourself a value investor, always looking for potentially undervalued names? For ideas on how to start your own value search, we ran a screen.

We began by screening the small-cap sector for stocks that appear undervalued relative to free cash flow, with P/FCF below 15, and undervalued relative to earnings growth, with PEG below 1.

We then screened for those with bullish sentiment from institutional investors, with significant net institutional purchases over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to outperform into the future.

Tool provided by Kapitall.

Do you think these stocks are trading below their fair value? Use this list as a starting point for your own analysis.

List sorted by net institutional purchases over the last quarter as a percent of share float.

1. hhgregg, Inc. (NYSE:HGG): Operates as a specialty retailer of consumer electronics, home appliances, and related services. Market cap at $394.87M, most recent closing price at $10.65. PEG at 0.64. P/FCF at 11.62. Net institutional purchases in the current quarter at 1.5M shares, which represents about 10.89% of the company's float of 13.78M shares.

2. C&J Energy Services, Inc. (NYSE:CJES): Provides specialty equipment services for oil and natural gas exploration and production companies in the Texas, Louisiana, and Oklahoma regions of the United States. Market cap at $911.2M, most recent closing price at $17.45. PEG at 0.25. P/FCF at 12.7. Net institutional purchases in the current quarter at 3.8M shares, which represents about 10.58% of the company's float of 35.93M shares.

3. SYNNEX Corp. (NYSE:SNX): Provides distribution and business process outsourcing services to resellers, retailers, and original equipment manufacturers. Market cap at $1.26B, most recent closing price at $33.29. PEG at 0.79. P/FCF at 6.35. Net institutional purchases in the current quarter at 2.6M shares, which represents about 9.89% of the company's float of 26.29M shares.

4. FTI Consulting, Inc. (NYSE:FCN): Operates as a business advisory company worldwide. Market cap at $1.32B, most recent closing price at $31.18. PEG at 0.86. P/FCF at 10.61. Net institutional purchases in the current quarter at 3.3M shares, which represents about 8.42% of the company's float of 39.18M shares.

5. Multimedia Games Inc. (NASDAQ:MGAM): Engages in the development and supply of comprehensive systems, content, electronic games, and player terminals for the casino, charity, international bingo, and video lottery markets in the United States and Internationally. Market cap at $349.1M, most recent closing price at $12.55. PEG at 0.65. P/FCF at 11.24. Net institutional purchases in the current quarter at 2.1M shares, which represents about 8.11% of the company's float of 25.89M shares.

6. InfoSpace, Inc. (INSP): Develops search tools and technologies that assist consumers with finding content and information on the Internet. Market cap at $501.98M, most recent closing price at $12.44. PEG at 0.63. P/FCF at 12.04. Net institutional purchases in the current quarter at 2.5M shares, which represents about 7.03% of the company's float of 35.57M shares.

7. Sun Healthcare Group, Inc. (NASDAQ:SUNH): Provides health care services primarily for senior population in the United States. Market cap at $364.28M, most recent closing price at $4.75. PEG at 0.55. P/FCF at 5.45. Net institutional purchases in the current quarter at 1.4M shares, which represents about 6.86% of the company's float of 20.42M shares.

8. Hollysys Automation Technologies, Ltd (NASDAQ:HOLI): Provides automation and control technology and applications in the People's Republic of China. Market cap at $512.52M, most recent closing price at $9.07. PEG at 0.7. P/FCF at 9.13. Net institutional purchases in the current quarter at 2.0M shares, which represents about 6.12% of the company's float of 32.66M shares.

9. Helen of Troy Limited (NASDAQ:HELE): Engages in the design, development, import, and distribution of brand-name consumer products worldwide. Market cap at $999.5M, most recent closing price at $30.94. PEG at 0.91. P/FCF at 11.38. Net institutional purchases in the current quarter at 1.7M shares, which represents about 5.81% of the company's float of 29.24M shares.

10. Atlas Air Worldwide Holdings Inc. (NASDAQ:AAWW): Provides air cargo and outsourced aircraft operating solutions worldwide. Market cap at $1.21B, most recent closing price at $44.95. PEG at 0.78. P/FCF at 11.7. Net institutional purchases in the current quarter at 1.5M shares, which represents about 5.78% of the company's float of 25.97M shares.

11. American Public Education, Inc. (NASDAQ:APEI): Provides online higher education focused primarily on serving the military and public service communities. Market cap at $526.3M, most recent closing price at $28.67. PEG at 0.71. P/FCF at 14.17. Net institutional purchases in the current quarter at 953.4K shares, which represents about 5.64% of the company's float of 16.91M shares.

12. Shanda Games Limited (NASDAQ:GAME): Engages in the development and operation of online games in the People's Republic of China. Market cap at $1.17B, most recent closing price at $4.11. PEG at 0.45. P/FCF at 6.02. Net institutional purchases in the current quarter at 4.1M shares, which represents about 5.57% of the company's float of 73.66M shares.

*Institutional data sourced from Fidelity, 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.