Looking for potentially undervalued stocks with bullish signals? We created a list with this in mind:
We started with a universe of small cap stocks (market caps between $300 million – $2 billion) and searched for names that may be considered undervalued by popular technical indicators. We looked for PEG ratios below 1. We also looked for Price to Sales ratios below 1.
If a stock has a low P/S ratio, it means that the price of the stock is cheap compared to the amount the company is making in revenues. If the number is below 1, then they can be considered undervalued.
Next we looked for signals that shares are ready for a rebound. We looked for positive sentiment from short sellers, who have been covering their net short positions month over month. Short sellers, who benefit when share price falls, cover their positions when they think there is more upside potential than downside potential in the near future.
We were left with 14 names, all listed below. Are short sellers correct? Do you think these undervalued stocks have more upside to price in? Use this list as a starting point for your own analysis.
List Average 1-Year Return: 15%
1. Asbury Automotive Group, Inc. (ABG, Earnings, Analysts, Financials): Operates as an automotive retailer in the United States. Market cap at $906.59M. Price/Sales at 0.21. Shares shorted have decreased from 2.73M to 2.37M over the last month, a decrease which represents about 1.43% of the company’s float of 25.12M shares. Days to cover ratio at 7.19 days.
2. American Axle & Manufacturing Holdings Inc. (AXL, Earnings, Analysts, Financials): Engages in the manufacture, engineering, design, and validation of driveline and drivetrain systems, and related components and chassis modules for automotive industry in the United States. Market cap at $915.29M. Price/Sales at 0.34. Shares shorted have decreased from 11.63M to 10.84M over the last month, a decrease which represents about 1.29% of the company’s float of 61.08M shares. Days to cover ratio at 7.91 days.
3. Basic Energy Services, Inc. (BAS, Earnings, Analysts, Financials): Provides a range of well site services to oil and gas drilling and producing companies in the United States. Market cap at $502.39M. PEG at 0.64. Price/Sales at 0.38. Shares shorted have decreased from 8.08M to 7.68M over the last month, a decrease which represents about 1.05% of the company’s float of 37.93M shares. Days to cover ratio at 4.82 days.
4. Big Lots Inc. (BIG, Earnings, Analysts, Financials): Operates as a broad line closeout retailer in the United States. Market cap at $1.81B. PEG at 0.96. Price/Sales at 0.34. Shares shorted have decreased from 8.39M to 7.32M over the last month, a decrease which represents about 1.84% of the company’s float of 58.08M shares. Days to cover ratio at 5.58 days.
5. Bridgepoint Education, Inc. (BPI, Earnings, Analysts, Financials): Provides postsecondary education services. Market cap at $581.68M. PEG at 0.36. Price/Sales at 0.58. Shares shorted have decreased from 8.47M to 6.75M over the last month, a decrease which represents about 9.57% of the company’s float of 17.97M shares. Days to cover ratio at 8.37 days.
6. CACI International Inc. (CACI, Earnings, Analysts, Financials): Provides information technology (IT) and professional services to the U. Market cap at $1.25B. PEG at 0.85. Price/Sales at 0.33. Shares shorted have decreased from 4.84M to 4.59M over the last month, a decrease which represents about 1.23% of the company’s float of 20.37M shares. Days to cover ratio at 10.15 days.
7. Diamond Foods, Inc. (DMND, Earnings, Analysts, Financials): Engages in processing, marketing, and distributing snack products, as well as culinary, in-shell, and ingredient nuts. Market cap at $424.21M. Price/Sales at 0.43. Shares shorted have decreased from 9.09M to 8.66M over the last month, a decrease which represents about 2.15% of the company’s float of 19.99M shares. Days to cover ratio at 25.5 days.
8. EnerSys (ENS, Earnings, Analysts, Financials): Engages in the manufacture and sale of industrial batteries. Market cap at $1.85B. PEG at 0.91. Price/Sales at 0.79. Shares shorted have decreased from 2.60M to 2.00M over the last month, a decrease which represents about 1.28% of the company’s float of 47.05M shares. Days to cover ratio at 5.85 days.
9. Key Energy Services Inc. (KEG, Earnings, Analysts, Financials): Operates as an onshore rig-based well servicing contractor. Market cap at $1.26B. PEG at 0.73. Price/Sales at 0.67. Shares shorted have decreased from 11.26M to 9.87M over the last month, a decrease which represents about 1.07% of the company’s float of 129.84M shares. Days to cover ratio at 2.69 days.
10. Meritor, Inc. (MTOR, Earnings, Analysts, Financials): Provides drivetrain mobility and braking solutions for original equipment (OE) manufacturers of trucks, trailers, and specialty vehicles. Market cap at $454.61M. PEG at 0.12. Price/Sales at 0.1. Shares shorted have decreased from 7.49M to 6.22M over the last month, a decrease which represents about 1.46% of the company’s float of 87.16M shares. Days to cover ratio at 4.71 days.
11. Sonic Automotive Inc. (SAH, Earnings, Analysts, Financials): Operates as an automotive retailer in the United States. Market cap at $1.01B. PEG at 0.72. Price/Sales at 0.13. Shares shorted have decreased from 7.72M to 5.52M over the last month, a decrease which represents about 6.08% of the company’s float of 36.17M shares. Days to cover ratio at 8.13 days.
12. Select Medical Holdings Corporation (SEM, Earnings, Analysts, Financials): Through its subsidiary, Select Medical Corporation, operates specialty hospitals and outpatient rehabilitation clinics in the United States. Market cap at $1.48B. PEG at 0.83. Price/Sales at 0.52. Shares shorted have decreased from 2.22M to 1.63M over the last month, a decrease which represents about 1.73% of the company’s float of 34.18M shares. Days to cover ratio at 3.48 days.
13. Sun Healthcare Group, Inc. (SUNH, Earnings, Analysts, Financials): Provides health care services primarily for senior population in the United States. Market cap at $632.81M. PEG at 0.96. Price/Sales at 0.33. Shares shorted have decreased from 1.27M to 974.05K over the last month, a decrease which represents about 1.35% of the company’s float of 21.87M shares. Days to cover ratio at 1.09 days.
14. Titan International Inc. (TWI, Earnings, Analysts, Financials): With its subsidiaries manufacture wheels, tires, and assemblies for off-highway vehicles used in the agricultural, earthmoving/construction, and consumer markets in the United States. Market cap at $843.69M. PEG at 0.32. Price/Sales at 0.49. Shares shorted have decreased from 11.83M to 11.26M over the last month, a decrease which represents about 1.42% of the company’s float of 40.01M shares. Days to cover ratio at 16.59 days.
Short data sourced from Yahoo! Finance, all other data sourced from Finviz.
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Analyze These Ideas: Getting Started
Dig Deeper: Access Company Snapshots, Charts, Filings
- Asbury Automotive Group, Inc. (ABG, Chart, Download SEC Filings)
- American Axle & Manufacturing Holdings Inc. (AXL, Chart, Download SEC Filings)
- Basic Energy Services, Inc. (BAS, Chart, Download SEC Filings)
- Big Lots Inc. (BIG, Chart, Download SEC Filings)
- Bridgepoint Education, Inc. (BPI, Chart, Download SEC Filings)
- CACI International Inc. (CACI, Chart, Download SEC Filings)
- Diamond Foods, Inc. (DMND, Chart, Download SEC Filings)
- EnerSys (ENS, Chart, Download SEC Filings)
- Key Energy Services Inc. (KEG, Chart, Download SEC Filings)
- Meritor, Inc. (MTOR, Chart, Download SEC Filings)
- Sonic Automotive Inc. (SAH, Chart, Download SEC Filings)
- Select Medical Holdings Corporation (SEM, Chart, Download SEC Filings)
- Sun Healthcare Group, Inc. (SUNH, Chart, Download SEC Filings)
- Titan International Inc. (TWI, Chart, Download SEC Filings)
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