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To find potentially undervalued companies that may be candidates for short covering, one idea is to look for companies with a lot of selling pressure and increases in shares shorted.

We did just that here. We ran a screen on companies seeing significant increases in shares shorted month-over-month for those with the worst annual performance.

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.)

Do you think these companies deserve such bad attention? Use this list as a starting-off point for your own analysis.

List sorted by annual performance.

1. Central European Distribution Corp. (NASDAQ:CEDC): Beverages Industry. Market cap of $397.83M. The stock has lost 76.29% over the past year. Shares shorted have increased from 6.45M to 8.85M month-over-month, a change representing 3.51% of the company's 68.41M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.73). The stock has performed poorly over the last month, losing 43.61%.

2. MGIC Investment Corp. (NYSE:MTG): Property & Casualty Insurance Industry. Market cap of $494.83M. The stock has lost 67.20% over the past year. Shares shorted have increased from 21.57M to 25.66M month-over-month, a change representing 2.22% of the company's 184.54M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 3.14). The stock has had a couple of great days, gaining 29.47% over the last week.

3. VanceInfo Technologies Inc. (NYSE:VIT): Information Technology Services Industry. Market cap of $497.29M. The stock has lost 60.91% over the past year. Shares shorted have increased from 10.18M to 10.85M month-over-month, a change representing 3.38% of the company's 19.80M share float. It's been a rough couple of days for the stock, losing 10.51% over the last week.

4. Human Genome Sciences Inc. (HGSI): Biotechnology Industry. Market cap of $2.41B. The stock has lost 57.01% over the past year. Shares shorted have increased from 13.85M to 15.88M month-over-month, a change representing 1.07% of the company's 190.02M share float. The stock is currently stuck in a downtrend, trading 13.52% below its SMA20, 35.06% below its SMA50, and 46.55% below its SMA200. It's been a rough couple of days for the stock, losing 8.35% over the last week.

5. MannKind Corp. (NASDAQ:MNKD): Biotechnology Industry. Market cap of $335.28M. The stock has lost 56.39% over the past year. Shares shorted have increased from 20.76M to 22.70M month-over-month, a change representing 2.45% of the company's 79.29M share float. The stock has had a couple of great days, gaining 6.67% over the last week.

6. Quad/Graphics, Inc. (NYSE:QUAD): Business Services Industry. Market cap of $919.79M. The stock has lost 53.83% over the past year. Shares shorted have increased from 1.17M to 1.68M month-over-month, a change representing 2.24% of the company's 22.76M share float. The stock has performed poorly over the last month, losing 42.69%.

7. CoreLogic, Inc. (NYSE:CLGX): Property & Casualty Insurance Industry. Market cap of $895.97M. The stock has lost 52.72% over the past year. Shares shorted have increased from 4.05M to 5.96M month-over-month, a change representing 2.01% of the company's 95.23M share float. The stock has had a couple of great days, gaining 6.58% over the last week.

8. MedAssets, Inc. (NASDAQ:MDAS): Healthcare Information Services Industry. Market cap of $626.38M. The stock has lost 48.75% over the past year. Shares shorted have increased from 3.21M to 3.69M month-over-month, a change representing 1.07% of the company's 44.84M share float. The stock has had a couple of great days, gaining 11.06% over the last week.

9. Overseas Shipholding Group Inc. (OSG): Shipping Industry. Market cap of $481.57M. The stock has lost 48.52% over the past year. Shares shorted have increased from 8.48M to 9.07M month-over-month, a change representing 2.33% of the company's 25.34M share float. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 5.53%, current ratio at 2.69, and quick ratio at 2.33. The stock has performed poorly over the last month, losing 34.15%.

10. STR Holdings, Inc. (NYSE:STRI): Rubber & Plastics Industry. Market cap of $456.72M. The stock has lost 47.59% over the past year. Shares shorted have increased from 7.51M to 9.31M month-over-month, a change representing 5.05% of the company's 35.62M share float. The stock has performed poorly over the last month, losing 20.92%.

11. MakeMyTrip Limited (NASDAQ:MMYT): General Entertainment Industry. Market cap of $689.18M. The stock has lost 45.91% over the past year. Shares shorted have increased from 1.77M to 2.00M month-over-month, a change representing 3.01% of the company's 7.63M share float. The stock has performed poorly over the last month, losing 17.01%.

12. Central European Media Enterprises Ltd. (NASDAQ:CETV): Broadcasting Industry. Market cap of $785.56M. The stock has lost 43.26% over the past year. Shares shorted have increased from 3.27M to 3.88M month-over-month, a change representing 2.44% of the company's 24.99M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 3.16). The stock has performed poorly over the last month, losing 35.65%.

13. Tekelec (NASDAQ:TKLC): Processing Systems & Products Industry. Market cap of $468.84M. The stock has lost 40.79% over the past year. Shares shorted have increased from 3.14M to 3.80M month-over-month, a change representing 1.27% of the company's 51.80M share float. The stock has performed poorly over the last month, losing 14.39%.

14. USANA Health Sciences Inc. (NYSE:USNA): Drug Related Products Industry. Market cap of $406.35M. The stock has lost 39.44% over the past year. Shares shorted have increased from 1.57M to 1.94M month-over-month, a change representing 5.37% of the company's 6.89M share float. The stock has had a couple of great days, gaining 9.32% over the last week.

15. Trina Solar Ltd. (NYSE:TSL): Semiconductor Industry. Market cap of $1.24B. The stock has lost 38.78% over the past year. Shares shorted have increased from 13.45M to 14.93M month-over-month, a change representing 2.54% of the company's 58.36M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 3.03). The stock has had a couple of great days, gaining 20.08% over the last week. The stock has performed poorly over the last month, losing 12.45%.

16. Intermec, Inc. (NYSE:IN): Computer Peripherals Industry. Market cap of $420.11M. The stock has lost 36.71% over the past year. Shares shorted have increased from 1.87M to 2.87M month-over-month, a change representing 1.69% of the company's 59.19M share float. The stock is currently stuck in a downtrend, trading 5.73% below its SMA20, 24.68% below its SMA50, and 34.56% below its SMA200. The stock has had a couple of great days, gaining 5.22% over the last week.

17. United States Steel Corp. (NYSE:X): Steel & Iron Industry. Market cap of $3.97B. The stock has lost 36.68% over the past year. Shares shorted have increased from 21.04M to 23.29M month-over-month, a change representing 1.57% of the company's 143.21M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.48). The stock has performed poorly over the last month, losing 30.55%.

18. WebMD Health Corp. (NASDAQ:WBMD): Healthcare Information Services Industry. Market cap of $1.92B. The stock has lost 36.38% over the past year. Shares shorted have increased from 2.36M to 3.23M month-over-month, a change representing 1.65% of the company's 52.62M share float. The stock has lost 36.38% over the last year.

19. KBW Inc (NYSE:KBW): Asset Management Industry. Market cap of $496.72M. The stock has lost 36.35% over the past year. Shares shorted have increased from 2.03M to 2.43M month-over-month, a change representing 1.34% of the company's 29.77M share float. The stock has performed poorly over the last month, losing 17.87%.

20. Advanced Energy Industries, Inc. (NASDAQ:AEIS): Diversified Electronics Industry. Market cap of $428.01M. The stock has lost 36.05% over the past year. Shares shorted have increased from 2.58M to 3.01M month-over-month, a change representing 1.16% of the company's 37.05M share float. The stock has had a couple of great days, gaining 8.52% over the last week.

Short data sourced from Yahoo Finance; all other data sourced from Finviz.

Source: 20 Worst-Performing Stocks In Short-Sellers' Sights