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All of the stocks mentioned below are trading at deep discounts to the average analyst target price (used as a proxy for fair value). In addition, all of these stocks have seen a significant decrease in shares shorted over the last month; implying that short sellers believe their market values will soon rise...

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Short sellers seem to think the upside potential outweighs the downside potential of these names--what do you think? Full details below.

1. Nanometrics Incorporated (NASDAQ:NANO): Scientific & Technical Instruments Industry. Market cap of $348.25M. Shares shorted dropped from 1.32M last month to 1.18M this month. This change is equivalent to 0.82% of the floating shares. Target price at 21 vs current price at 15.26 (implies a potential upside of 37.61%). The stock has gained 52.82% over the last year.

2. Spreadtrum Communications Inc. (NASDAQ:SPRD): Semiconductor Industry. Market cap of 967.81M. Shares shorted dropped from 3.55M last month to 3.10M this month. This change is equivalent to 1.31% of the floating shares. Target price at 27.08 vs current price at 19.84 (implies a potential upside of 36.49%). The stock has performed poorly over the last month, losing 16.58%.

3. iGATE Corporation (NASDAQ:IGTE): Information Technology Services Industry. Market cap of $1.00B. Shares shorted dropped from 2.10M last month to 1.73M this month. This change is equivalent to 1.23% of the floating shares. Target price at 23.6 vs current price at 17.72 (implies a potential upside of 33.18%). The stock has gained 56.53% over the last year.

4. Community Health Systems, Inc. (NYSE:CYH): Hospitals Industry. Market cap of $2.70B. Shares shorted dropped from 13.17M last month to 12.14M this month. This change is equivalent to 1.16% of the floating shares. Target price at 37.88 vs current price at 28.5 (implies a potential upside of 32.91%). Might be undervalued at current levels, with a PEG ratio at 0.72, and P/FCF ratio at 7.02. The stock has lost 24.93% over the last year.

5. Isle of Capri Casinos Inc. (NASDAQ:ISLE): Resorts & Casinos Industry. Market cap of $337.48M. Shares shorted dropped from 1.34M last month to 1.21M this month. This change is equivalent to 0.72% of the floating shares. Target price at 11.72 vs current price at 8.83 (implies a potential upside of 32.73%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.2). The stock is a short squeeze candidate, with a short float at 5.69% (equivalent to 10.1 days of average volume). The stock has performed poorly over the last month, losing 10.2%.

6. Textron Inc. (NYSE:TXT): Conglomerates Industry. Market cap of $6.26B. Shares shorted dropped from 26.36M last month to 23.19M this month. This change is equivalent to 1.15% of the floating shares. Target price at 30.04 vs current price at 22.68 (implies a potential upside of 32.45%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.75). The stock is a short squeeze candidate, with a short float at 8.4% (equivalent to 5.94 days of average volume). The stock has performed poorly over the last month, losing 12.41%.

7. Suntech Power Holdings Co. Ltd. (NYSE:STP): Diversified Electronics Industry. Market cap of $1.33B. Shares shorted dropped from 25.07M last month to 23.07M this month. This change is equivalent to 1.58% of the floating shares. Target price at 9.82 vs current price at 7.43 (implies a potential upside of 32.17%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.9). The stock has performed poorly over the last month, losing 13.15%.

8. Royal Caribbean Cruises Ltd. (NYSE:RCL): General Entertainment Industry. Market cap of $8.11B. Shares shorted dropped from 10.99M last month to 9.82M this month. This change is equivalent to 0.87% of the floating shares. Target price at 49.67 vs current price at 37.8 (implies a potential upside of 31.4%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.91). It's been a rough couple of days for the stock, losing 6.02% over the last week.

9. Peabody Energy Corp. (NYSE:BTU): Industrial Metals & Minerals Industry. Market cap of $15.78B. Shares shorted dropped from 6.98M last month to 5.10M this month. This change is equivalent to 0.7% of the floating shares. Target price at 76.59 vs current price at 58.65 (implies a potential upside of 30.59%). The stock has performed poorly over the last month, losing 10.98%.

10. Southern Copper Corp. (NYSE:SCCO): Copper Industry. Market cap of $30.14B. Shares shorted dropped from 4.51M last month to 3.05M this month. This change is equivalent to 0.86% of the floating shares. Target price at 46.18 vs current price at 35.59 (implies a potential upside of 29.76%. The stock has gained 31.44% over the last year.

11. Primerica, Inc. (NYSE:PRI): Life Insurance Industry. Market cap of $1.54B. Shares shorted dropped from 2.30M last month to 979.37K this month. This change is equivalent to 3.45% of the floating shares. Target price at 27 vs current price at 20.84 (implies a potential upside of 29.56%). The stock has lost 12.38% over the last year.

12. Group 1 Automotive Inc. (NYSE:GPI): Auto Dealerships Industry. Market cap of $918.28M. Shares shorted dropped from 3.97M last month to 3.76M this month. This change is equivalent to 0.98% of the floating shares. Target price at 48.78 vs current price at 37.92 (implies a potential upside of 28.64%). The stock is a short squeeze candidate, with a short float at 16.46% (equivalent to 10.17 days of average volume). The stock has performed poorly over the last month, losing 12.21%.

13. Winnebago Industries Inc. (NYSE:WGO): Recreational Vehicles Industry. Market cap of $336.34M. Shares shorted dropped from 4.97M last month to 4.78M this month. This change is equivalent to 0.7% of the floating shares. Target price at 14.67 vs current price at 11.48 (implies a potential upside of 27.79%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.43). The stock is a short squeeze candidate, with a short float at 16.5% (equivalent to 14.68 days of average volume). The stock has lost 4.46% over the last year.

14. Gafisa S.A. (NYSE:GFA): Residential Construction Industry. Market cap of $2.22B. Shares shorted dropped from 10.00M last month to 8.47M this month. This change is equivalent to 0.71% of the floating shares. Target price at 13.07 vs current price at 10.34 (implies a potential upside of 26.4%). This is a risky stock that is significantly more volatile than the overall market (beta = 2.48). It's been a rough couple of days for the stock, losing 5.93% over the last week.

15. FTI Consulting, Inc. (NYSE:FCN): Management Services Industry. Market cap of $1.57B. Shares shorted dropped from 6.05M last month to 5.76M this month. This change is equivalent to 0.71% of the floating shares. Target price at 46.25 vs current price at 37.03 (implies a potential upside of 24.9%). The stock is a short squeeze candidate, with a short float at 13.88% (equivalent to 9.85 days of average volume). The stock has lost 4.4% over the last year.

16. JAKKS Pacific, Inc. (NASDAQ:JAKK): Toys & Games Industry. Market cap of $531.96M. Shares shorted dropped from 4.21M last month to 3.94M this month. This change is equivalent to 1.01% of the floating shares. Target price at 24 vs current price at 19.51 (implies a potential upside of 23.01%). The stock is a short squeeze candidate, with a short float at 14.58% (equivalent to 26.62 days of average volume). The stock has gained 33.31% over the last year.

*Shorts data sourced from Yahoo Finance, rest of data sourced from Finviz.

Source: Squeeze Ideas: 16 Stocks Boosted by Short Covering