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Are you looking for large cap ideas? You might find some interesting candidates by studying short seller activity ...

Short sellers attempt to sell high and buy low. They borrow shares from other investors, sell them on the open market, and buy back the same number of shares initially borrowed.

If the short seller can buy back the stock at a lower price, he turns a profit off the difference -- basically, he's betting on the stock to lose.

Short-sellers take on unlimited risk because they (theoretically) have unlimited downside -- if the stock keeps rising, they keep losing, so they tend to be a bit more sophisticated than your average investor.

For this list, we wanted to focus on large cap stocks that have seen a significant decrease in shares shorted over the last month. Meaning that short sellers, who tend to be a little bit more sophisticated, seem to think the upside potential outweighs the downside potential of these names…

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.

Here are the four stocks that made the cut:

1. Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR): Processed & Packaged Goods Industry. Market cap of $12.41B. Float short at 16.56%. Shorted shares decreased from 20.28M to 17.66M shares - this is equivalent to 2.36% of the floating shares. The stock has had a couple of great days, gaining 7.68% over the last week.

2. priceline.com Incorporated (NASDAQ:PCLN): General Entertainment Industry. Market cap of $24.90B. Float short at 7.45%. Shorted shares decreased from 4.03M to 3.67M shares - this is equivalent to 0.73% of the floating shares. The stock has gained 162.31% over the last year.

3. Starwood Hotels & Resorts Worldwide Inc. (NYSE:HOT): Lodging Industry. Market cap of $11.80B. Float short at 5.12%. Shorted shares decreased from 11.10M to 9.97M shares - this is equivalent to 0.61% of the floating shares. The stock has gained 31.42% over the last year.

4. Mylan, Inc. (NASDAQ:MYL): Drugs Industry. Market cap of $10.28B. Float short at 6.87%. Shorted shares decreased from 32.31M to 30.05M shares - this is equivalent to 0.55% of the floating shares. The stock has gained 20.37% over the last year.

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

Source: Short Squeeze: Large Caps Stocks With Significant Short Covering