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The following is a list of highly shorted stocks that have seen significant institutional outflows over the last three months. All of the stocks mentioned below have short floats in excess of 20%.

If you're a contrarian investor, this excessive pessimism might raise a red flag. Full details below.

Institutional data sourced from Reuters, short float and performance data sourced from Finviz.

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. Note: The numbers on top of items represent the forward P/E ratio, if available.


The list has been sorted by the change in institutional ownership.

1. DSW Inc. (DSW): Apparel Stores Industry. Market cap of $1.59B. Institutional investors currently own 18,619,251 shares vs. 19,899,379 shares held three months ago (-6.43% change). Short float at 27.51%, which implies a short ratio of 11.64 days. The stock has gained 35.42% over the last year.

2. Ebix Inc. (EBIX): Business Software & Services Industry. Market cap of $845.85M. Institutional investors currently own 29,340,750 shares vs. 30,753,405 shares held three months ago (-4.59% change). Short float at 25.61%, which implies a short ratio of 12.69 days. The stock has gained 46.77% over the last year.

3. Barnes & Noble, Inc. (BKS): Specialty Retail Industry. Market cap of $967.29M. Institutional investors currently own 26,536,730 shares vs. 27,812,304 shares held three months ago (-4.59% change). Short float at 29.27%, which implies a short ratio of 15.94 days. The stock has lost -11.27% over the last year.

4. Strayer Education Inc. (STRA): Education & Training Services Industry. Market cap of $2.05B. Institutional investors currently own 16,794,213 shares vs. 17,469,087 shares held three months ago (-3.86% change). Short float at 23.66%, which implies a short ratio of 11.12 days. The stock has lost -28% over the last year.

5. Constant Contact, Inc. (CTCT): Marketing Services Industry. Market cap of $859.3M. Institutional investors currently own 34,861,303 shares vs. 35,493,125 shares held three months ago (-1.78% change). Short float at 37.44%, which implies a short ratio of 31.26 days. The stock has gained 77.66% over the last year.

6. CBIZ, Inc. (CBZ): Business Services Industry. Market cap of $315.06M. Institutional investors currently own 35,586,430 shares vs. 36,018,659 shares held three months ago (-1.2% change). Short float at 20.68%, which implies a short ratio of 21.55 days. The stock has lost -13.92% over the last year.

7. Duoyuan Global Water Inc. (DGW): Pollution & Treatment Controls Industry. Market cap of $313.78M. Institutional investors currently own 8,373,497 shares vs. 8,470,723 shares held three months ago (-1.15% change). Short float at 26.32%, which implies a short ratio of 9.97 days. The stock has lost -67.3% over the last year.

8. LAN Airlines S.A. (LFL): Regional Airlines Industry. Market cap of $10.06B. Institutional investors currently own 23,260,543 shares vs. 23,464,443 shares held three months ago (-.87% change). Short float at 35.53%, which implies a short ratio of 20.12 days. The stock has gained 81.87% over the last year.

9. Mindray Medical International Limited (MR): Medical Instruments & Supplies Industry. Market cap of $3.04B. Institutional investors currently own 83,860,544 shares vs. 84,130,939 shares held three months ago (-.32% change). Short float at 20.62%, which implies a short ratio of 21.98 days. The stock has lost -20.76% over the last year.

10. Liz Claiborne Inc. (LIZ): Apparel Clothing Industry. Market cap of $666.96M. Institutional investors currently own 111,042,683 shares vs. 111,260,697 shares held three months ago (-.2% change). Short float at 20.13%, which implies a short ratio of 8.9 days. The stock has gained 17.86% over the last year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Contrarian Ideas: Highly Shorted Stocks Being Dumped by the Smart Money