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If you are interested in potentially underestimated stocks, here is a list that may give some interesting ideas.

We ran a screen on stocks that are being targeted by short sellers, with short floats above 15%, and that are also technically oversold (with RSI(14) below 40).

Next we 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.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

Do you think hedge funds are calling it right on these names? Use this list as a starting point for your own analysis.

List sorted by RSI(14).

1. Higher One Inc. (ONE): Provides technology and payment services to the higher education industry in the United States. Market cap at $479.13M, most recent closing price at $9.09. RSI (14) at 13.57, and short float at 30.94%. Days to cover at 41. Net institutional purchases in the current quarter at 4.3M shares, which represents about 17.32% of the company's float of 24.83M shares.

2. GT Advanced Technologies Inc. (GTAT): Provides polysilicon production technology and multicrystalline ingot growth systems, and related photovoltaic (PV) manufacturing services for the solar industry worldwide. Market cap at $378.45M, most recent closing price at $3.18. RSI (14) at 19.29, and short float at 30.25%. Days to Cover 12. Net institutional purchases in the current quarter at 9.2M shares, which represents about 7.8% of the company's float of 117.89M shares.

3. Zillow, Inc. (Z): Operates an online real estate information marketplace. Market cap at $839.43M, most recent closing price at $25.11. RSI (14) at 22.66, and short float at 32.73%. Days to cover 8.7. Net institutional purchases in the current quarter at 3.1M shares, which represents about 17.8% of the company's float of 17.42M shares.

4. Central European Media Enterprises Ltd. (CETV): Operates as a vertically integrated media company operating broadcast, content, and new media businesses in central and eastern European countries. Market cap at $361.25M, most recent closing price at $4.68. RSI (14) at 24.38, and short float at 15.74%. Days to cover 27.8. Net institutional purchases in the current quarter at 2.2M shares, which represents about 6.31% of the company's float of 34.89M shares.

5. VIVUS Inc. (VVUS): Engages in the development and commercialization of therapeutic products for underserved markets in the United States. Market cap at $1.04B, most recent closing price at $10.29. RSI (14) at 24.98, and short float at 17.59%. Days to cover at 6. Net institutional purchases in the current quarter at 9.6M shares, which represents about 11.72% of the company's float of 81.93M shares.

6. NII Holdings Inc. (NIHD): Provides wireless communication services to businesses and individuals primarily in Mexico, Brazil, Argentina, Peru, and Chile. Market cap at $868.55M, most recent closing price at $5.06. RSI (14) at 25.84, and short float at 37.59%. Days to cover 18.4. Net institutional purchases in the current quarter at 10.1M shares, which represents about 6.39% of the company's float of 158.18M shares.

7. Molycorp, Inc. (MCP): Focuses on the production and sale of rare earth oxides from stockpiled feedstocks in the western hemisphere. Market cap at $914.67M, most recent closing price at $6.63.RSI (14) at 27.66, and short float at 33.23%. Days to cover at 7.6. Net institutional purchases in the current quarter at 11.5M shares, which represents about 12.62% of the company's float of 91.13M shares.

* Institutional data sourced from Fidelity, all other data sourced from Finviz.

Source: Hedge Funds Are Buying These 7 Highly-Shorted And Oversold Stocks