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

We used changes in short selling to search for stocks about which the market has become more bullish, using the universe of small-cap stocks with high projected 5-year EPS growth (above 20%).

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 think short sellers are calling it right on these names? Use this list as a starting-off point for your own analysis.

List sorted by decrease in share shorted as a percent of share float.

1. ChinaCast Education Corporation (OTCPK:CAST): Education & Training Services Industry. Market cap of $246.91M. 5-year projected EPS growth at 25.0%. Shares shorted have decreased from 9.78M to 8.75M, a change representing 2.96% of the company's 34.77M share float. Might be undervalued at current levels, with a PEG ratio at 0.83, and P/FCF ratio at 7.39. The stock is a short squeeze candidate, with a short float at 21.76% (equivalent to 17.19 days of average volume). The stock has performed poorly over the last month, losing 17.06%.

2. China Information Technology, Inc. (CNIT): Application Software Industry. Market cap of $128.68M. 5-year projected EPS growth at 23.0%. Shares shorted have decreased from 1.78M to 1.19M, a change representing 2.81% of the company's 20.97M share float. The stock has recently rebounded, and is currently trading 14.86% above its SMA20 and 8.95% above its SMA50. However, the stock still trades 39.52% below its SMA200. The stock has had a good month, gaining 28.13%.

3. Glu Mobile, Inc. (GLUU): Multimedia & Graphics Software Industry. Market cap of $280.12M. 5-year projected EPS growth at 33.75%. Shares shorted have decreased from 4.09M to 3.10M, a change representing 2.77% of the company's 35.73M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.12). Exhibiting strong upside momentum--currently trading 13.23% above its SMA20, 23.21% above its SMA50, and 74.71% above its SMA200. The stock has had a good month, gaining 10.64%.

4. Amtech Systems Inc. (ASYS): Semiconductor Equipment & Materials Industry. Market cap of $172.07M. 5-year projected EPS growth at 35.0%. Shares shorted have decreased from 1.30M to 1.11M, a change representing 2.11% of the company's 9.01M share float. The stock is currently stuck in a downtrend, trading 7.34% below its SMA20, 11.31% below its SMA50, and 17.71% below its SMA200. It's been a rough couple of days for the stock, losing 14.09% over the last week.

5. Meru Networks, Inc. (MERU): Wireless Communications Industry. Market cap of $197.44M. 5-year projected EPS growth at 24.25%. Shares shorted have decreased from 3.98M to 3.89M, a change representing 1.60% of the company's 5.61M share float. The stock is a short squeeze candidate, with a short float at 28.2% (equivalent to 23.53 days of average volume). The stock is currently stuck in a downtrend, trading 13.8% below its SMA20, 26.32% below its SMA50, and 33.37% below its SMA200. It's been a rough couple of days for the stock, losing 6.72% over the last week.

6. Winnebago Industries Inc. (WGO): Recreational Vehicles Industry. Market cap of $265.08M. 5-year projected EPS growth at 32.80%. Shares shorted have decreased from 4.78M to 4.43M, a change representing 1.29% of the company's 27.19M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.45). The stock is a short squeeze candidate, with a short float at 15.29% (equivalent to 13.48 days of average volume). It's been a rough couple of days for the stock, losing 5.41% over the last week.

7. POZEN Inc. (POZN): Drug Manufacturers Industry. Market cap of $131.56M. 5-year projected EPS growth at 30.0%. Shares shorted have decreased from 1.57M to 1.28M, a change representing 1.20% of the company's 24.18M share float. The stock has lost 38.38% over the last year.

8. Advanced Analogic Technologies, Inc. (AATI): Semiconductor Industry. Market cap of $260.41M. 5-year projected EPS growth at 25.0%. Shares shorted have decreased from 1.98M to 1.56M, a change representing 1.17% of the company's 35.86M share float. The stock has gained 85.93% over the last year.

9. China Biologic Products, Inc. (CBPO): Biotechnology Industry. Market cap of $246.18M. 5-year projected EPS growth at 30.0%. Shares shorted have decreased from 1.20M to 1.13M, a change representing 1.11% of the company's 6.31M share float. The stock is a short squeeze candidate, with a short float at 8.34% (equivalent to 20.29 days of average volume). The stock has lost 16.03% over the last year.

10. Landec Corp. (LNDC): Chemicals Industry. Market cap of $172.33M. 5-year projected EPS growth at 22.50%. Shares shorted have decreased from 1.07M to 805.94K, a change representing 1.11% of the company's 23.78M share float. The stock has gained 2.67% over the last year.

11. Aceto Corp. (ACET): Chemicals Industry. Market cap of $166.38M. 5-year projected EPS growth at 22.0%. Shares shorted have decreased from 1.16M to 909.07K, a change representing 1.04% of the company's 24.23M share float. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.2%, current ratio at 2.42, and quick ratio at 1.42. The stock has gained 5.75% over the last year.

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

Source: 11 High-Growth Small Caps With Bullish Short Trends