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There are many sources to find out what analysts or traders predict the direction of stocks to be, but one of the most interesting is shares shorted. Shorting a share indicates a specific prediction that the stock’s price will soon fall, and because shorting requires significant amounts of borrowing, short sellers are given background checks to trade and are generally considered “smart money” investors.

We ran a screen on the retail sector for stocks seeing bullish sentiment from short sellers, with 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.

Short sellers are clearly bullish on these names – are you? Use this list as a starting point for your own analysis.

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

1. Collective Brands, Inc. (NYSE:PSS): Engages in the wholesale and retail of footwear and related accessories worldwide. Market cap of $873.56M. Shares shorted have decreased from 14.55M to 12.69M month-over-month, a change representing 3.37% of the company's 55.24M share float. The stock is a short squeeze candidate, with a short float at 21.24% (equivalent to 6.6 days of average volume). The stock has had a couple of great days, gaining 5.26% over the last week.

2. Carter's, Inc. (NYSE:CRI): Designs, sources, and markets branded children's wear. Market cap of $2.38B. Shares shorted have decreased from 5.10M to 3.52M month-over-month, a change representing 3.20% of the company's 49.38M share float. Exhibiting strong upside momentum--currently trading 5.62% above its SMA20, 11.5% above its SMA50, and 28.17% above its SMA200. The stock has had a good month, gaining 13.36%.

3. Aeropostale, Inc. (NYSE:ARO): Designs, markets, and sells casual sportswear and other fashion merchandise under its own brands, principally targeted at customers 11 to 18 years old. Market cap of $1.37B. Shares shorted have decreased from 15.06M to 13.35M month-over-month, a change representing 2.14% of the company's 80.00M share float. The stock has lost 30.19% over the last year.

4. Brunswick Corporation (NYSE:BC): Provides recreation products worldwide. Market cap of $1.57B. Shares shorted have decreased from 9.72M to 8.05M month-over-month, a change representing 1.89% of the company's 88.35M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 3.01). The stock has lost 1.78% over the last year.

5. Perry Ellis International Inc. (NASDAQ:PERY): Engages in designing, sourcing, marketing, and licensing apparel products for men and women in the United States and internationally. Market cap of $232.15M. Shares shorted have decreased from 1.85M to 1.66M month-over-month, a change representing 1.80% of the company's 10.54M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.15). The stock is a short squeeze candidate, with a short float at 12.02% (equivalent to 5.94 days of average volume). It's been a rough couple of days for the stock, losing 5.9% over the last week.

6. Stein Mart Inc. (NASDAQ:SMRT): Operates retail stores that offer fashion merchandise for women and men in the United States. Market cap of $293.66M. Shares shorted have decreased from 1.73M to 1.29M month-over-month, a change representing 1.66% of the company's 26.52M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.5). The stock has lost 28.57% over the last year.

7. Maidenform Brands, Inc. (NYSE:MFB): Designs, sources, and markets a range of intimate apparel products for women in the United States and internationally. Market cap of $433.81M. Shares shorted have decreased from 2.01M to 1.65M month-over-month, a change representing 1.58% of the company's 22.83M share float. The stock has lost 30.23% over the last year.

8. EZCORP, Inc. (NASDAQ:EZPW): Provides credit services to people who lack the cash or access to credit to meet short-term needs. Market cap of $1.47B. Shares shorted have decreased from 2.46M to 1.82M month-over-month, a change representing 1.45% of the company's 44.01M share float. The stock has gained 5.12% over the last year.

9. Kohl's Corp. (NYSE:KSS): Operates department stores in the United States. Market cap of $12.90B. Shares shorted have decreased from 14.22M to 11.17M month-over-month, a change representing 1.30% of the company's 235.38M share float. Might be undervalued at current levels, with a PEG ratio at 0.87, and P/FCF ratio at 13.27. The stock has lost 3.18% over the last year.

10. American Eagle Outfitters, Inc. (NYSE:AEO): Operates as an apparel and accessories retailer in the United States and Canada. Market cap of $2.87B. Shares shorted have decreased from 14.14M to 12.06M month-over-month, a change representing 1.25% of the company's 166.69M share float. The stock has lost 1.46% over the last year.

11. Aaron's, Inc. (NYSE:AAN): Operates as a specialty retailer of consumer electronics, computers, residential furniture, household appliances, and accessories in the United States and Canada. Market cap of $2.05B. Shares shorted have decreased from 4.63M to 3.81M month-over-month, a change representing 1.21% of the company's 67.55M share float.The stock has had a couple of great days, gaining 12.88% over the last week.

12. Lululemon Athletica Inc. (NASDAQ:LULU): Engages in the design, manufacture, and distribution of athletic apparel and accessories for women, men, and female youth primarily in Canada, the United States, and Australia. Market cap of $6.85B. Shares shorted have decreased from 14.82M to 13.67M month-over-month, a change representing 1.16% of the company's 98.93M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.5). The stock has performed poorly over the last month, losing 12.26%.

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

Source: 12 Retail Stocks With Bullish Short Trends