Interested in gaining exposure to commodities? For a closer look at stocks of the basic materials sector, we ran a screen.

We began by screening the basic materials sector for stocks with strong liquidity, with current ratios above 3. The current ratio is current assets/current liabilities, so ratios above 3 indicate the company has at least 3 times the liquid assets to cover their short-term liabilities.

We then screened for those that also appear undervalued relative to the Graham Number. The Graham Number is a measure of 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.

*Tool provided by* *Kapitall**.*

Do you think these stocks are priced too low? Use this list as a starting point for your own analysis.

List sorted by potential upside implied by the Graham Number.

** 1. Northwest Pipe Co. (NASDAQ:NWPX):** Manufactures and markets large-diameter, high-pressure steel pipeline systems for use in water infrastructure applications, primarily related to drinking water systems. Market cap at $196.77M, most recent closing price at $20.24. Current ratio at 3.9. Diluted TTM earnings per share at 1.54, and a MRQ book value per share value at 26.2, implies a Graham Number fair value = sqrt(22.5*1.54*26.2) = $30.13. Based on the stock's price at $21.9, this implies a potential upside of 37.58% from current levels.

** 2. Hecla Mining Co. (NYSE:HL):** Engages in the discovery, acquisition, development, production, and marketing of silver, gold, lead, and zinc. Market cap at $1.24B, most recent closing price at $4.28. Current ratio at 3.63. Diluted TTM earnings per share at 0.4, and a MRQ book value per share value at 4.03, implies a Graham Number fair value = sqrt(22.5*0.4*4.03) = $6.02. Based on the stock's price at $4.54, this implies a potential upside of 32.65% from current levels.

** 3. OM Group Inc. (NYSE:OMG):** Develops, produces, and markets specialty chemicals, advanced materials, and electrochemical energy storage products worldwide. Market cap at $605.69M, most recent closing price at $18.24. Current ratio at 3.23. Diluted TTM earnings per share at 0.6, and a MRQ book value per share value at 40.06, implies a Graham Number fair value = sqrt(22.5*0.6*40.06) = $23.26. Based on the stock's price at $18.52, this implies a potential upside of 25.57% from current levels.

** 4. FutureFuel Corp. (NYSE:FF):** Engages in the manufacture and sale of specialty chemicals and bio-based products primarily in the United States. Market cap at $418.98M, most recent closing price at $9.87. Current ratio at 6.28. Diluted TTM earnings per share at 0.94, and a MRQ book value per share value at 7.08, implies a Graham Number fair value = sqrt(22.5*0.94*7.08) = $12.24. Based on the stock's price at $9.97, this implies a potential upside of 22.74% from current levels.

** 5. Chemtura Corporation (NYSE:CHMT):** Engages in the manufacture and sale of specialty chemical solutions and consumer products worldwide. Market cap at $1.48B, most recent closing price at $14.71. Current ratio at 3.08. Diluted TTM earnings per share at 1.34, and a MRQ book value per share value at 11.01, implies a Graham Number fair value = sqrt(22.5*1.34*11.01) = $18.22. Based on the stock's price at $15.38, this implies a potential upside of 18.46% from current levels.

** 6. Dawson Geophysical Co. (NASDAQ:DWSN):** Provides onshore seismic data acquisition services in the United States. Market cap at $186.12M, most recent closing price at $22.48. Current ratio at 3.16. Diluted TTM earnings per share at 1.53, and a MRQ book value per share value at 25.24, implies a Graham Number fair value = sqrt(22.5*1.53*25.24) = $29.48. Based on the stock's price at $24.95, this implies a potential upside of 18.14% from current levels.

** 7. Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX):** Engages in the exploration, mining, and production of mineral resources. Market cap at $30.76B, most recent closing price at $31.56. Current ratio at 3.51. Diluted TTM earnings per share at 4.01, and a MRQ book value per share value at 17, implies a Graham Number fair value = sqrt(22.5*4.01*17) = $39.16. Based on the stock's price at $33.23, this implies a potential upside of 17.86% from current levels.

** 8. Metals USA Holdings Corp. (NYSE:MUSA):** Market cap at $540.12M, most recent closing price at $14.46. Current ratio at 4.35. Diluted TTM earnings per share at 1.84, and a MRQ book value per share value at 7.4, implies a Graham Number fair value = sqrt(22.5*1.84*7.4) = $17.50. Based on the stock's price at $14.95, this implies a potential upside of 17.08% from current levels.

** 9. Oil States International Inc. (NYSE:OIS):** Provides specialty products and services to the oil and gas drilling and production companies worldwide. Market cap at $3.5B, most recent closing price at $65.46. Current ratio at 3.24. Diluted TTM earnings per share at 7.17, and a MRQ book value per share value at 41.36, implies a Graham Number fair value = sqrt(22.5*7.17*41.36) = $81.68. Based on the stock's price at $70.56, this implies a potential upside of 15.77% from current levels.

*BVPS and EPS 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.