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When a stock is experiencing a lot of short selling, investors should pause and ask whether the high pessimism is fair or excessive. If it appears excessive, short covering may soon cause a rally...

We report a list of stocks with this idea in mind, searching for highly shorted stocks (with short floats above 20%) that have maintained significant net buying interest from insiders over the last 6 months.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.


Do you think these stocks are candidates for a short squeeze? Use this list as a starting-off point for your own analysis.

List sorted by net insider purchases as a percent of share float.

1. Saks Incorporated (NYSE:SKS): Department Stores Industry. Market cap of $1.77B. Float short at 25.01%. Net insider purchases over the last 6 months at 4,696,280 shares, which is 4.41% of the company's 106.57M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.62). The stock has had a couple of great days, gaining 6.07% over the last week.



2. MannKind Corp. (NASDAQ:MNKD):
Biotechnology Industry. Market cap of $535.83M. Float short at 29.62%. Net insider purchases over the last 6 months at 3,478,136 shares, which is 4.39% of the company's 79.17M share float. The stock has had a couple of great days, gaining 7.89% over the last week.



3. American Superconductor Corporation (NASDAQ:AMSC):
Diversified Electronics Industry. Market cap of $385.83M. Float short at 24.48%. Net insider purchases over the last 6 months at 1,508,478 shares, which is 3.86% of the company's 39.06M share float. The stock has performed poorly over the last month, losing 29.67%.

4. Auxilium Pharmaceuticals Inc. (NASDAQ:AUXL): Drug Related Products Industry. Market cap of $930.49M. Float short at 21.57%. Net insider purchases over the last 6 months at 973,072 shares, which is 2.22% of the company's 43.80M share float. The stock has performed poorly over the last month, losing 12.35%.

5. ITT Educational Services Inc. (NYSE:ESI):
Education & Training Services Industry. Market cap of $2.13B. Float short at 28.17%. Net insider purchases over the last 6 months at 374,000 shares, which is 1.68% of the company's 22.29M share float. It's been a rough couple of days for the stock, losing 7.73% over the last week.

6. Echo Global Logistics, Inc. (NASDAQ:ECHO):
Trucking Industry. Market cap of $357.18M. Float short at 22.35%. Net insider purchases over the last 6 months at 202,262 shares, which is 1.64% of the company's 12.37M share float. The stock has had a couple of great days, gaining 13.58% over the last week.

*Insider data sourced from Yahoo! Finance, 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: 6 Highly Shorted Stocks Being Bought Up by Insiders