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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 10%, 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 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.

1. Abiomed Inc. (NASDAQ:ABMD): Engages in the research, development, and sale of medical devices that provide circulatory support to acute heart failure patients across the continuum of care in heart recovery. Market cap at $509.76M, most recent closing price at $12.85. Net institutional purchases in the current quarter at 2.5M shares, which represents about 7.2% of the company's float of 34.72M shares. RSI (14) at 37.75, and short float at 21.88%. The 2 top holders of the stock are Primecap Management, and Wellington Management.

2. Cincinnati Bell Inc. (NYSE:CBB): Provides data and voice communications services over wireline and wireless networks, as well as offers data center operations, related management services, and equipment in the United States. Market cap at $1.06B, most recent closing price at $5.30. Net institutional purchases in the current quarter at 11.2M shares, which represents about 6.22% of the company's float of 180.05M shares. RSI (14) at 38.68, and short float at 14%. The 2 top holders of the stock are GAMCO Investors, and Wells Fargo & Co.

3. Columbia Sportswear Company (NASDAQ:COLM): Engages in the design, development, sourcing, marketing, and distribution of outdoor apparel, footwear, accessories, and equipment in the United States, Latin America, the Asia Pacific, Europe, the Middle East, Africa, and Canada. Market cap at $1.72B, most recent closing price at $50.80. Net institutional purchases in the current quarter at 1.3M shares, which represents about 10.43% of the company's float of 12.47M shares. RSI (14) at 27, and short float at 22.25%. The 2 top holders of the stock are Royce & Associates, and Southernsun Asset Management.

4. Leap Wireless International Inc. (LEAP): Provides digital wireless services under the 'Cricket' brand name in the United States. Market cap at $466.99M, most recent closing price at $5.90. Net institutional purchases in the current quarter at 3.7M shares, which represents about 8.79% of the company's float of 42.11M shares. RSI (14) at 37.65, and short float at 26%. The 2 top holders of the stock are MHR Fund Management, and Capital Research Global Investors.

5. Vera Bradley, Inc. (NASDAQ:VRA): Engages in the design, production, marketing, and retail of functional accessories for women under the Vera Bradley' brand. Market cap at $947.48M, most recent closing price at $23.36. Net institutional purchases in the current quarter at 1.7M shares, which represents about 9.63% of the company's float of 17.66M shares. RSI (14) at 39.11, and short float at 52%. The 2 top holders of the stock are Daruma Capital Management, and SAC Capital Advisors.

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

Source: Hedge Funds Are Buying These 5 Highly Shorted And Oversold Stocks