Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message| ()  

If you’re a follower of short seller trends, then this list may be of interest to you.

The companies listed below are improving their profit margin by way of significant increases of their Trailing Twelve Month Free operating cash flow/Revenue (TTM Free OCF/R) relative to their Free Operating Cash Flow/Revenue-3 Year Average.

Furthermore, these names have experienced significant decreases in shares shorted over the previous month.

Strong free cash flow signals a company's ability to pay debt, dividends, and invest in their business growth. When FOCF/R is greater than their 3 year average, it's means the company has become increasingly capable of generating overall revenue per sale, a good sign that profitability and value will increase.

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.

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Short sellers are beginning to cover their short positions because they feel the potential upside outweighs the downside. Do you agree? Use the information below to start your own analysis.

1. Power-One Inc. (PWER): Diversified Electronics Industry. Market cap of $881.89M. Free OCF/Revenue-TTM at 14.62% up from its Free OCF/Revenue-3 Year Average of 8.54%. Shares shorted dropped from 33.48M last month to 29.88M this month. This represents a 3.68% change in the company's 97.70M share float. The stock is a short squeeze candidate, with a short float at 30.41% (equivalent to 7.56 days of average volume). The stock has gained 26.83% over the last year.

2. TAM S.A. (TAM): Major Airlines Industry. Market cap of $3.35B. Free OCF/Revenue-TTM at 2.82% up from its Free OCF/Revenue-3 Year Average of 1.19%. Shares shorted dropped from 1.99M last month to 1.83M this month. This represents a 3.43% change in the company's 4.67M share float. The stock has gained 73.2% over the last year.

3. Constant Contact, Inc. (CTCT): Marketing Services Industry. Market cap of $674.86M. Free OCF/Revenue-TTM at 5.22% up from its Free OCF/Revenue-3 Year Average of 3.77%. Shares shorted dropped from 8.68M last month to 7.73M this month. This represents a 3.3% change in the company's 28.76M share float. The stock is a short squeeze candidate, with a short float at 27.1% (equivalent to 14.71 days of average volume). The stock has performed poorly over the last month, losing 13.36%.

4. Aaron's, Inc. (AAN): Rental & Leasing Services Industry. Market cap of $2.17B. Free OCF/Revenue-TTM at 5.567% up from its Free OCF/Revenue-3 Year Average of 1.51%. Shares shorted dropped from 6.74M last month to 4.75M this month. This represents a 2.76% change in the company's 72.04M share float. The stock is a short squeeze candidate, with a short float at 6.15% (equivalent to 8.67 days of average volume). The stock has gained 68.36% over the last year.

5. Scientific Games Corporation (SGMS): Multimedia & Graphics Software Industry. Market cap of $826.79M. Free OCF/Revenue-TTM at 7.96% up from its Free OCF/Revenue-3 Year Average of 5.18%. Shares shorted dropped from 3.80M last month to 3.38M this month. This represents a 1.49% change in the company's 28.23M share float. It's been a rough couple of days for the stock, losing 9.38% over the last week.

6. SUPERVALU Inc. (SVU): Grocery Stores Industry. Market cap of $1.84B. Free OCF/Revenue-TTM at 1.31% up from its Free OCF/Revenue-3 Year Average of 1.03%. Shares shorted dropped from 40.79M last month to 37.86M this month. This represents a 1.39% change in the company's 210.06M share float. It's been a rough couple of days for the stock, losing 15.28% over the last week.

7. Vistaprint N.V. (VPRT): Business Services Industry. Market cap of $2.05B. Free OCF/Revenue-TTM at 12.11% up from its Free OCF/Revenue-3 Year Average of 7.69%. Shares shorted dropped from 4.64M last month to 4.12M this month. This represents a 1.34% change in the company's 38.69M share float. The stock is a short squeeze candidate, with a short float at 10.1% (equivalent to 10.84 days of average volume). The stock has performed poorly over the last month, losing 11.94%.

8. Interactive Brokers Group, Inc. (IBKR): Investment Brokerage Industry. Market cap of $681.17M. Free OCF/Revenue-TTM at 144.89% up from its Free OCF/Revenue-3 Year Average of 65.81%. Shares shorted dropped from 1.31M last month to 788.82K this month. This represents a 1.27% change in the company's 41.05M share float. It's been a rough couple of days for the stock, losing 5.78% over the last week.

9. H&R Block, Inc. (HRB): Personal Services Industry. Market cap of $4.85B. Free OCF/Revenue-TTM at 38.60% up from its Free OCF/Revenue-3 Year Average of 12.98%. Shares shorted dropped from 26.37M last month to 22.74M this month. This represents a 1.26% change in the company's 287.92M share float. The stock has gained 6.79% over the last year.

10. Aruba Networks, Inc. (ARUN): Networking & Communication Devices Industry. Market cap of $2.73B. Free OCF/Revenue-TTM at 10.40% up from its Free OCF/Revenue-3 Year Average of 7.85%. Shares shorted dropped from 11.47M last month to 10.75M this month. This represents a 0.74% change in the company's 97.22M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.01). The stock has performed poorly over the last month, losing 15.06%.

11. Red Robin Gourmet Burgers Inc. (RRGB): Restaurants Industry. Market cap of $544.27M. Free OCF/Revenue-TTM at 4.93% up from its Free OCF/Revenue-3 Year Average of 3.35%. Shares shorted dropped from 2.21M last month to 2.14M this month. This represents a 0.61% change in the company's 11.52M share float. The stock is a short squeeze candidate, with a short float at 15.48% (equivalent to 7.84 days of average volume). The stock has had a good month, gaining 29.36%.

12. Affymetrix Inc. (AFFX): Scientific & Technical Instruments Industry. Market cap of $508.31M. Free OCF/Revenue-TTM at 14.32% up from its Free OCF/Revenue-3 Year Average of 8.35%. Shares shorted dropped from 10.62M last month to 10.28M this month. This represents a 0.54% change in the company's 62.75M share float. The stock is a short squeeze candidate, with a short float at 14.74% (equivalent to 8.81 days of average volume). The stock has had a couple of great days, gaining 20.37% over the last week.

13. Beckman Coulter Inc. (BEC): Scientific & Technical Instruments Industry. Market cap of $5.92B. Free OCF/Revenue-TTM at 7.49% up from its Free OCF/Revenue-3 Year Average of 5.51%. Shares shorted dropped from 2.78M last month to 2.41M this month. This represents a 0.53% change in the company's 70.05M share float. The stock has gained 51.32% over the last year.

14. Nanometrics Incorporated (NANO): Scientific & Technical Instruments Industry. Market cap of $356.86M. Free OCF/Revenue-TTM at 14.07% up from its Free OCF/Revenue-3 Year Average of 3.88%. Shares shorted dropped from 1.18M last month to 1.09M this month. This represents a 0.53% change in the company's 17.01M share float. The stock has gained 55.6% over the last year.

15. BancorpSouth, Inc. (BXS): Regional Banks Industry. Market cap of $997.71M. Free OCF/Revenue-TTM at 23.21% up from its Free OCF/Revenue-3 Year Average of 12.84%. Shares shorted dropped from 8.68M last month to 8.32M this month. This represents a 0.5% change in the company's 72.18M share float. The stock is a short squeeze candidate, with a short float at 11.49% (equivalent to 11.88 days of average volume). It's been a rough couple of days for the stock, losing 6.71% over the last week.

*Data sourced form Screener.co and Reuters on Tuesday, June 7th.

Source: 15 Profitable Stocks With Significant Decreases in Short Selling