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When evaluating a stock’s sentiment, shares shorted can be a very interesting component to that analysis because shorts indicate a clear-cut belief in the short-term direction of a stock’s price. This information can be even more telling when combined with longer-term indicators.

With that in mind, we decided to run a screen on the highest growth stocks, with projected EPS growth for the next 5 years above 15%. Among these stocks, we found those with extremely large drops in the number of shares shorted over the last 3 months.



Short sellers think the upside potential outweighs the downside - do you agree? Read below, using this list as a starting-off point for your own analysis into high growth opportunities.

List sorted by decrease in shares shorted. (Note: Data collected on Wednesday afternoon)

1. CSX Corp. (CSX): Railroads Industry. Market cap of $27.78B. Projected EPS growth over the next 5 years at 15.45%. Shares shorted have decreased 70.43% over the last 3 months (from 22.69M to 6.71M). The stock has gained 38.32% over the last year.



2. Visa, Inc. (V): Business Services Industry. Market cap of $54.90B. Projected EPS growth over the next 5 years at 18.51%. Shares shorted have decreased 63.42% over the last 3 months (from 15.50M to 5.67M). The stock has lost 17.69% over the last year.



3. IntercontinentalExchange, Inc. (ICE): Diversified Investments Industry. Market cap of $8.86B. Projected EPS growth over the next 5 years at 15.95%. Shares shorted have decreased 61.98% over the last 3 months (from 2.51M to 0.95M). The stock has gained 8.85% over the last year.



4. BlackRock, Inc. (BLK): Asset Management Industry. Market cap of $37.35B. Projected EPS growth over the next 5 years at 19.23%. Shares shorted have decreased 53.17% over the last 3 months (from 1.18M to 0.55M). The stock has lost 5.41% over the last year.

5. Kansas City Southern (KSU): Railroads Industry. Market cap of $5.40B. Projected EPS growth over the next 5 years at 30.30%. Shares shorted have decreased 52.77% over the last 3 months (from 3.79M to 1.79M). It's been a rough couple of days for the stock, losing 5.68% over the last week.

6. EQT Corporation (EQT): Gas Utilities Industry. Market cap of $6.97B. Projected EPS growth over the next 5 years at 18.07%. Shares shorted have decreased 52.21% over the last 3 months (from 6.55M to 3.13M). It's been a rough couple of days for the stock, losing 7.11% over the last week.

7. Juniper Networks, Inc. (JNPR): Networking & Communication Devices Industry. Market cap of $20.25B. Projected EPS growth over the next 5 years at 18.57%. Shares shorted have decreased 51.45% over the last 3 months (from 18.31M to 8.89M). After a solid performance over the last year, JNPR has pulled back during recent sessions. The stock is 4.4% below its SMA20 and 7.57% below its SMA50, but remains 12.64% above its SMA200. The stock has performed poorly over the last month, losing 12.08%.

8. Cablevision Systems Corporation (CVC)
: CATV Systems Industry. Market cap of $10.07B. Projected EPS growth over the next 5 years at 22.04%. Shares shorted have decreased 48.43% over the last 3 months (from 8.61M to 4.44M). The stock has gained 30.6% over the last year.

9. Stericycle, Inc. (SRCL): Waste Management Industry. Market cap of $7.72B. Projected EPS growth over the next 5 years at 17.30%. Shares shorted have decreased 46.26% over the last 3 months (from 5.21M to 2.80M). The stock has gained 61.77% over the last year.

10. Concho Resources, Inc. (CXO):
Oil & Gas Drilling & Exploration Industry. Market cap of $10.18B. Projected EPS growth over the next 5 years at 46.25%. Shares shorted have decreased 46.17% over the last 3 months (from 3.66M to 1.97M). After a solid performance over the last year, CXO has pulled back during recent sessions. The stock is 6.21% below its SMA20 and 4.76% below its SMA50, but remains 24.26% above its SMA200. The stock has gained 81.14% over the last year.

11. Pride International Inc. (PDE): Oil & Gas Drilling & Exploration Industry. Market cap of $7.47B. Projected EPS growth over the next 5 years at 19.12%. Shares shorted have decreased 45.56% over the last 3 months (from 5.07M to 2.76M). The stock has gained 29.63% over the last year.

12. Ametek Inc. (AME): Industrial Electrical Equipment Industry. Market cap of $6.81B. Projected EPS growth over the next 5 years at 16.31%. Shares shorted have decreased 43.47% over the last 3 months (from 1.49M to 0.84M). The stock has gained 50.05% over the last year.

13. Whole Foods Market, Inc. (WFMI): Grocery Stores Industry. Market cap of $10.92B. Projected EPS growth over the next 5 years at 15.95%. Shares shorted have decreased 43.02% over the last 3 months (from 11.74M to 6.69M). The stock has gained 61.32% over the last year.

14. Denbury Resources Inc. (DNR): Independent Oil & Gas Industry. Market cap of $8.99B. Projected EPS growth over the next 5 years at 15.76%. Shares shorted have decreased 41.97% over the last 3 months (from 18.44M to 10.70M). After a solid performance over the last year, DNR has pulled back during recent sessions. The stock is 6.38% below its SMA20 and 3.2% below its SMA50, but remains 20.21% above its SMA200. The stock has gained 26.67% over the last year.

15. Dolby Laboratories, Inc. (DLB): Diversified Electronics Industry. Market cap of $5.63B. Projected EPS growth over the next 5 years at 16.34%. Shares shorted have decreased 41.03% over the last 3 months (from 3.12M to 1.84M). The stock has lost 15.14% over the last year.

16. Timken Co. (TKR):
Machine Tools & Accessories Industry. Market cap of $4.95B. Projected EPS growth over the next 5 years at 15.53%. Shares shorted have decreased 39.56% over the last 3 months (from 1.05M to 0.63M). It's been a rough couple of days for the stock, losing 5.68% over the last week.

17. Alexion Pharmaceuticals, Inc. (ALXN): Drug Manufacturer. Market cap of $9.03B. Projected EPS growth over the next 5 years at 37.88%. Shares shorted have decreased 38.80% over the last 3 months (from 4.82M to 2.95M). It's been a rough couple of days for the stock, losing 5.28% over the last week.

18. Dollar General Corporation (DG): Discount, Variety Stores Industry. Market cap of $10.86B. Projected EPS growth over the next 5 years at 16.15%. Shares shorted have decreased 38.32% over the last 3 months (from 11.17M to 6.89M). The stock has had a good month, gaining 11.03%.

19. Urban Outfitters Inc. (URBN):
Apparel Stores Industry. Market cap of $5.12B. Projected EPS growth over the next 5 years at 19.05%. Shares shorted have decreased 36.80% over the last 3 months (from 16.06M to 10.15M). The stock has lost 19.45% over the last year.

20. Wynn Resorts Ltd. (WYNN): Resorts & Casinos Industry. Market cap of $16.22B. Projected EPS growth over the next 5 years at 35.78%. Shares shorted have decreased 36.14% over the last 3 months (from 4.40M to 2.81M). This is a risky stock that is significantly more volatile than the overall market (beta = 2.53). The stock has gained 51.5% over the last year.

*Shares shorted data sourced from Daily Finance (Note: Current date for shares shorted at 3/31/11, 3 months ago date at 12/31/10), projected EPS and all other data sourced from Finviz.

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

Source: 20 High-Growth Stocks With Steep Drops in Shares Shorted