Do you consider yourself a value investor? If you like to look for stocks that you believe are trading below their fair value, your answer might be yes.
With value investing in mind, we ran a screen on potentially undervalued stocks. We began by screening for smart money stock picks: stocks that have seen buying attention from institutional investors over the current quarter, as well as from company insiders over the last six months.
We then screened for those that appear undervalued to target price, trading at steep discounts to even their lowest (most pessimistic) target prices. We considered the lowest target price because target prices are known to be inflated. We also only considered companies with sufficient analyst coverage, with five or more analyst target prices.
Business section: Investing ideas
Below is the final list of stocks from this screen. These stocks have the backing of smart money investors (both institutional investors and insiders), and also appear undervalued relative to target price.
Do you think these names should be trading higher? Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)
1. American Equity Investment Life Holding
2. Och-Ziff Capital Management Group
3. ZIOPHARM Oncology
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Alexander Crawford does not own any of the shares mentioned above. Target price and insider data sourced from Yahoo! Finance, institutional data sourced from Fidelity.
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