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The following is a list of oversold stocks, as defined by the RSI(14) indicator. All of these stocks have seen institutional investor inflows over the last 3 months. Will the smart money double down on these recent losers, or will they exacerbate the declines by cutting their losses?

To control the quality of the list, we only focused on stocks with market caps north of $300M. The list has been sorted by the percentage increase in institutional ownership over the last 3 months.

All institutional transaction data sourced from Reuters.com.

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1. DG FastChannel, Inc. (DGIT): Business Services Industry. Market cap of $697.92M. RSI(14) indicator at 23.62. Current institutional ownership at 28,272,541 shares, vs. 22,473,841 shares held 3 months ago (+25.8% change). Short float at 18.04%, which implies a short ratio of 7.06 days.

2. Sanmina-SCI Corp. (SANM): Printed Circuit Boards Industry. Market cap of $759.38M. RSI(14) indicator at 29.72. Current institutional ownership at 77,216,713 shares, vs. 69,057,542 shares held 3 months ago (+11.82% change). Short float at 11.54%, which implies a short ratio of 5.91 days.

3. Dole Food Company Inc. (DOLE): Food Industry. Market cap of $808.19M. RSI(14) indicator at 28.65. Current institutional ownership at 47,093,862 shares, vs. 43,093,220 shares held 3 months ago (+9.28% change). Short float at 29.06%, which implies a short ratio of 18.04 days.

4. Capitol Federal Financial (CFFN): Savings & Loans Industry. Market cap of $1,92B. RSI(14) indicator at 21.03. Current institutional ownership at 9,203,818 shares, vs. 8,464,043 shares held 3 months ago (+8.74% change). Short float at 23.4%, which implies a short ratio of 17.15 days.

5. STMicroelectronics NV (STM): Semiconductor Industry. Market cap of $6,01B. RSI(14) indicator at 27.24. Current institutional ownership at 39,008,943 shares, vs. 36,286,661 shares held 3 months ago (+7.5% change). Short float at 1.42%, which implies a short ratio of 3.84 days.

6. ITT Educational Services Inc. (ESI): Education & Training Services Industry. Market cap of $1,81B. RSI(14) indicator at 25.87. Current institutional ownership at 42,820,217 shares, vs. 40,057,766 shares held 3 months ago (+6.9% change). Short float at 22.97%, which implies a short ratio of 5.38 days.

7. Winn-Dixie Stores Inc. (WINN): Grocery Stores Industry. Market cap of $439.07B. RSI(14) indicator at 29.92. Current institutional ownership at 48,465,929 shares, vs. 46,172,267 shares held 3 months ago (+4.97% change). Short float at 5.09%, which implies a short ratio of 7.68 days.

Disclosure: No position

Source: 7 Oversold Stocks Being Chased by Smart Money