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Short selling is a helpful indicator for the sentiment surrounding a stock. When shorting increases, investors are generally more bearish about the stock, and when it decreases, investors are generally more bullish.

Using this indicator, we screened for stocks that have seen significant decreases in shares shorted month-over-month, indicating a more optimistic outlook. We ran this screen on high-growth stocks, with five-year projected EPS over 20%. Additionally, we screened for stocks that are undervalued relative to earnings growth, with PEG below 1.

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.


(Click to enlarge)

Do you agree with short sellers on these stocks? Use this list as a starting-off point for your own analysis.

List sorted by market cap.

1. Nucor Corporation (NUE): Steel & Iron Industry. Market cap of $13.12B. PEG at 0.78. 5-year projected EPS at 65.30%. Shares shorted have decreased from 13.43M to 11.93M month-over-month, a change representing 0.48% of the company's 314.63M share float. The stock has gained 9.9% over the last year.

2. Credicorp Ltd. (BAP): Money Center Banks Industry. Market cap of $6.68B. PEG at 0.37. 5-year projected EPS at 29.40%. Shares shorted have decreased from 1.49M to 1.28M month-over-month, a change representing 0.41% of the company's 50.71M share float. The stock has lost 9.46% over the last year.

3. Arch Coal Inc. (ACI): Industrial Metals & Minerals Industry. Market cap of $5.76B. PEG at 0.41. 5-year projected EPS at 50.98%. Shares shorted have decreased from 11.28M to 7.70M month-over-month, a change representing 1.71% of the company's 209.61M share float. The stock has had a couple of great days, gaining 5.93% over the last week.

4. Jefferies Group Inc. (JEF): Investment Brokerage Industry. Market cap of $4.29B. PEG at 0.64. 5-year projected EPS at 25.83%. Shares shorted have decreased from 9.44M to 6.97M month-over-month, a change representing 1.33% of the company's 186.33M share float. The stock has lost 4.07% over the last year.

5. Kennametal Inc. (KMT): Machine Tools & Accessories Industry. Market cap of $3.68B. PEG at 0.81. 5-year projected EPS at 25.03%. Shares shorted have decreased from 2.29M to 1.82M month-over-month, a change representing 0.59% of the company's 79.66M share float. Exhibiting strong upside momentum--currently trading 10.3% above its SMA20, 10.49% above its SMA50, and 17.69% above its SMA200. The stock has had a couple of great days, gaining 9.44% over the last week.

6. Cree Inc. (CREE): Semiconductor Equipment & Materials Industry. Market cap of $3.67B. PEG at 0.90. 5-year projected EPS at 22.69%. Shares shorted have decreased from 23.40M to 22.63M month-over-month, a change representing 0.74% of the company's 103.88M share float. The stock is a short squeeze candidate, with a short float at 21.67% (equivalent to 6.16 days of average volume). The stock is currently stuck in a downtrend, trading 7.12% below its SMA20, 16.08% below its SMA50, and 36.21% below its SMA200. The stock has performed poorly over the last month, losing 15.26%.

7. CTC Media, Inc (CTCM): Broadcasting Industry. Market cap of $3.42B. PEG at 0.35. 5-year projected EPS at 67.60%. Shares shorted have decreased from 1.67M to 1.04M month-over-month, a change representing 1.10% of the company's 57.51M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.28). The stock has had a good month, gaining 12.41%.

8. The Washington Post Company (WPO): Education & Training Services Industry. Market cap of $3.35B. PEG at 0.47. 5-year projected EPS at 29.40%. Shares shorted have decreased from 832.73K to 731.14K month-over-month, a change representing 2.08% of the company's 4.88M share float. The stock is a short squeeze candidate, with a short float at 11.2% (equivalent to 20.86 days of average volume). The stock has gained 1.96% over the last year.

9. Cyberonics Inc. (CYBX): Medical Appliances & Equipment Industry. Market cap of $810.40M. PEG at 0.73. 5-year projected EPS at 24.08%. Shares shorted have decreased from 2.56M to 1.89M month-over-month, a change representing 2.88% of the company's 23.30M share float. The stock is a short squeeze candidate, with a short float at 7.01% (equivalent to 6.89 days of average volume). The stock has had a couple of great days, gaining 6.73% over the last week.

10. PDL BioPharma, Inc. (PDLI): Biotechnology Industry. Market cap of $807.35M. PEG at 0.36. 5-year projected EPS at 26.00%. Shares shorted have decreased from 19.38M to 18.29M month-over-month, a change representing 0.91% of the company's 120.34M share float. The stock is a short squeeze candidate, with a short float at 13.11% (equivalent to 7.02 days of average volume). The stock has gained 12.45% over the last year.

11. AeroVironment, Inc. (AVAV): Aerospace/Defense Products & Services Industry. Market cap of $800.34M. PEG at 0.81. 5-year projected EPS at 38.17%. Shares shorted have decreased from 1.67M to 1.57M month-over-month, a change representing 0.56% of the company's 17.99M share float. The stock is a short squeeze candidate, with a short float at 8.57% (equivalent to 5.48 days of average volume). Exhibiting strong upside momentum--currently trading 13.05% above its SMA20, 19.44% above its SMA50, and 30% above its SMA200. The stock has had a good month, gaining 23.99%.

12. Comtech Telecommunications Corp. (CMTL): Communication Equipment Industry. Market cap of $768.70M. PEG at 0.38. 5-year projected EPS at 35.00%. Shares shorted have decreased from 2.44M to 2.28M month-over-month, a change representing 0.63% of the company's 25.42M share float. The stock is a short squeeze candidate, with a short float at 8.93% (equivalent to 7.39 days of average volume). The stock has had a couple of great days, gaining 6.49% over the last week.

13. Ameresco, Inc. (AMRC): Industrial Electrical Equipment Industry. Market cap of $632.40M. PEG at 0.94. 5-year projected EPS at 20.90%. Shares shorted have decreased from 724.45K to 625.56K month-over-month, a change representing 0.62% of the company's 16.04M share float. The stock has had a couple of great days, gaining 8.46% over the last week.

14. Rubicon Technology, Inc. (RBCN): Semiconductor Industry. Market cap of $395.60M. PEG at 0.33. 5-year projected EPS at 26.67%. Shares shorted have decreased from 8.89M to 8.61M month-over-month, a change representing 1.60% of the company's 17.52M share float. The stock is a short squeeze candidate, with a short float at 37.6% (equivalent to 11.24 days of average volume). The stock has performed poorly over the last month, losing 24.56%.

15. Great Lakes Dredge & Dock Corporation (GLDD): Heavy Construction Industry. Market cap of $361.68M. PEG at 0.40. 5-year projected EPS at 32.70%. Shares shorted have decreased from 3.01M to 2.64M month-over-month, a change representing 0.67% of the company's 55.06M share float. The stock has had a couple of great days, gaining 10.81% over the last week.

*Short data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 15 Undervalued, High-Growth Stocks With Bullish Short Trends