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A helpful gauge for the sentiment surrounding a stock is the buying trends of short sellers. When a stock sees a significant decrease in the number of shares shorted, it indicates that fewer short sellers are bearish on the company.

We ran a screen on stocks from the tech sector for those that appear undervalued to earnings growth, with PEG below 1. We screened these stocks for those seeing significant decreases in shares shorted month-over-month.

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 agree with short sellers’ optimism? Use this list as a starting-off point for your own analysis.

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

1. VanceInfo Technologies Inc. (VIT): Engages in the provision of information technology (IT) services. Market cap of $384.11M. PEG at 0.57. Shares shorted have decreased from 10.85M to 9.02M month-over-month, a change representing 12.96% of the company's 14.12M share float. The stock is a short squeeze candidate, with a short float at 23.49% (equivalent to 7.57 days of average volume). The stock is currently stuck in a downtrend, trading 24.41% below its SMA20, 42.87% below its SMA50, and 67.42% below its SMA200. It's been a rough couple of days for the stock, losing 24.72% over the last week.

2. Sky-mobi Limited (MOBI):
Engages in the operation of a mobile application store in the People's Republic of China. Market cap of $129.65M. PEG at 0.15. Shares shorted have decreased from 1.79M to 1.34M month-over-month, a change representing 6.21% of the company's 7.25M share float. The stock is currently stuck in a downtrend, trading 25.58% below its SMA20, 36.16% below its SMA50, and 53.11% below its SMA200. It's been a rough couple of days for the stock, losing 23.96% over the last week.

3. Rubicon Technology, Inc. (RBCN): Develops, manufactures, and sells monocrystalline sapphire and other crystalline products for light-emitting diodes (LED), radio frequency integrated circuits (RFICs), blue laser diodes, optoelectronics, and other optical applications. Market cap of $254.59M. PEG at 0.29. Shares shorted have decreased from 6.62M to 5.60M month-over-month, a change representing 5.82% of the company's 17.53M share float. The stock is a short squeeze candidate, with a short float at 24.44% (equivalent to 7.47 days of average volume).

4. Camelot Information Systems Inc. (CIS):
Provides enterprise application services and financial industry information technology (IT) services in the People's Republic of China. Market cap of $180.95M. PEG at 0.39. Shares shorted have decreased from 6.28M to 5.13M month-over-month, a change representing 4.19% of the company's 27.43M share float. The stock is a short squeeze candidate, with a short float at 15.4% (equivalent to 6.08 days of average volume). It's been a rough couple of days for the stock, losing 15.87% over the last week.

5. Amtech Systems Inc. (ASYS):
Engages in the design, assembly, sale, and installation of capital equipment and related consumables used in the manufacture of wafers, primarily for the solar and semiconductor industries. Market cap of $88.52M. PEG at 0.11. Shares shorted have decreased from 1.07M to 746.61K month-over-month, a change representing 3.59% of the company's 9.00M share float. The stock is currently stuck in a downtrend, trading 11.04% below its SMA20, 30.29% below its SMA50, and 55.09% below its SMA200.

6. Novellus Systems, Inc. (NVLS): Develops, manufactures, sells, and supports equipment used in the fabrication of integrated circuits. Market cap of $1.99B. PEG at 0.70. Shares shorted have decreased from 9.57M to 7.67M month-over-month, a change representing 2.94% of the company's 64.57M share float. The stock has gained 7.68% over the last year.

7. Advanced Semiconductor Engineering Inc. (ASX):
Provides semiconductor packaging and testing services for semiconductor companies. Market cap of $6.08B. PEG at 0.50. Shares shorted have decreased from 26.65M to 4.92M month-over-month, a change representing 2.28% of the company's 953.62M share float. It's been a rough couple of days for the stock, losing 8.91% over the last week.

8. Ebix Inc. (EBIX):
Provides on-demand software and e-commerce solutions to the insurance industry. Market cap of $559.58M. PEG at 0.57. Shares shorted have decreased from 12.96M to 12.34M month-over-month, a change representing 1.94% of the company's 31.99M share float. The stock is a short squeeze candidate, with a short float at 34.62% (equivalent to 23.28 days of average volume). It's been a rough couple of days for the stock, losing 15.68% over the last week.

9. ReneSola Ltd. (SOL): Engages in the manufacture and sale of solar wafers and solar power products. Market cap of $193.68M. PEG at 0.07. Shares shorted have decreased from 8.66M to 7.52M month-over-month, a change representing 1.88% of the company's 60.63M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 3.). The stock is currently stuck in a downtrend, trading 25.62% below its SMA20, 37.52% below its SMA50, and 69.7% below its SMA200. It's been a rough couple of days for the stock, losing 20.92% over the last week.

10. American Superconductor Corporation (AMSC): Provides wind turbine designs and electrical control systems primarily in North America, Europe, and the Asia-Pacific. Market cap of $257.56M. PEG at 0.20. Shares shorted have decreased from 9.83M to 9.11M month-over-month, a change representing 1.84% of the company's 39.07M share float. The stock is a short squeeze candidate, with a short float at 19.77% (equivalent to 7.16 days of average volume). The stock has performed poorly over the last month, losing 19.49%.

11. Teradyne Inc. (TER): Provides automatic test equipment products and services worldwide. Market cap of $2.12B. PEG at 0.48. Shares shorted have decreased from 21.57M to 18.35M month-over-month, a change representing 1.74% of the company's 185.43M share float. It's been a rough couple of days for the stock, losing 10.65% over the last week.

12. SanDisk Corp. (SNDK): Designs, develops, manufactures, and markets NAND-based flash data storage card products that are used in various consumer electronics products. Market cap of $10.10B. PEG at 0.62. Shares shorted have decreased from 10.13M to 6.82M month-over-month, a change representing 1.41% of the company's 235.34M share float. The stock has had a good month, gaining 20.85%.

*Short 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: 12 Undervalued Tech Stocks With Bullish Short Trends