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If you are interested in potentially underestimated stocks, here is a list that may give some interesting ideas.

We ran a screen on stocks that are being targeted by short sellers, with short floats above 15%, and that are also technically oversold (with RSI(14) below 40). We screened these stocks for those with the confidence of hedge funds, seeing significant net institutional purchases over the current quarter.

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 hedge funds are calling it right on these names? Use this list as a starting point for your own analysis.

List sorted by RSI(14).

1. Noah Holdings Limited (NYSE:NOAH): Engages in the distribution of wealth management products to the high net worth population in China. Market cap of $342.86M. Short float at 17.64%. RSI(14) at 25.4. Net institutional shares purchased over the current quarter at 530.7K, which is 3.04% of the company's 17.44M share float. The stock is currently stuck in a downtrend, trading 15.93% below its SMA20, 19.63% below its SMA50, and 47.12% below its SMA200. It's been a rough couple of days for the stock, losing 9.96% over the last week.

2. Shutterfly, Inc. (NASDAQ:SFLY): Provides an Internet-based social expression and personal publishing service that enables consumers to share, print, and preserve their memories through the medium of photography. Market cap of $789.09M. Short float at 21.98%. RSI(14) at 27.28. Net institutional shares purchased over the current quarter at 3.0M, which is 9.44% of the company's 31.77M share float. The stock is currently stuck in a downtrend, trading 9.87% below its SMA20, 32.32% below its SMA50, and 52.95% below its SMA200. It's been a rough couple of days for the stock, losing 9.32% over the last week.

3. Weight Watchers International, Inc. (NYSE:WTW): Provides weight management services worldwide. Market cap of $4.05B. Short float at 19.04%. RSI(14) at 32.05. Net institutional shares purchased over the current quarter at 4.1M, which is 11.68% of the company's 35.11M share float. The stock is a short squeeze candidate, with a short float at 19.04% (equivalent to 6.12 days of average volume). The stock is currently stuck in a downtrend, trading 6.64% below its SMA20, 14.58% below its SMA50, and 20.05% below its SMA200. The stock has gained 48.35% over the last year.

4. Molycorp, Inc. (NYSE:MCP): Focuses on the production and sale of rare earth oxides from stockpiled feedstocks in the western hemisphere. Market cap of $2.01B. Short float at 19.27%. RSI(14) at 34.78. Net institutional shares purchased over the current quarter at 2.4M, which is 4.63% of the company's 51.84M share float. The stock is currently stuck in a downtrend, trading 12.65% below its SMA20, 23.87% below its SMA50, and 50.34% below its SMA200. It's been a rough couple of days for the stock, losing 17.45% over the last week.

5. Vera Bradley, Inc. (NASDAQ:VRA): Engages in the design, production, marketing, and retail of functional accessories for women under the "Vera Bradley' brand. Market cap of $1.31B. Short float at 50.21%. RSI(14) at 36.08. Net institutional shares purchased over the current quarter at 5.0M, which is 25.32% of the company's 19.75M share float. The stock has performed poorly over the last month, losing 16.02%.

6. BroadSoft, Inc. (NASDAQ:BSFT): Provides software that enables fixed-line, mobile, and cable service providers to deliver voice and multimedia services over Internet protocol based networks. Market cap of $816.61M. Short float at 25.03%. RSI(14) at 37.03. Net institutional shares purchased over the current quarter at 6.0M, which is 24.07% of the company's 24.93M share float. The stock is currently stuck in a downtrend, trading 12.47% below its SMA20, 15.7% below its SMA50, and 17.29% below its SMA200. It's been a rough couple of days for the stock, losing 8.51% over the last week.

7. iRobot Corporation (NASDAQ:IRBT): Designs and builds robots for the consumer, government, and industrial markets. Market cap of $807.14M. Short float at 15.08%. RSI(14) at 37.61. Net institutional shares purchased over the current quarter at 3.1M, which is 12.59% of the company's 24.62M share float. The stock is a short squeeze candidate, with a short float at 15.08% (equivalent to 11.46 days of average volume). The stock is currently stuck in a downtrend, trading 8.86% below its SMA20, 9.27% below its SMA50, and 8.64% below its SMA200. The stock has gained 19.98% over the last year.

8. Universal Display Corp. (PANL): Engages in the research, development, and commercialization of organic light emitting diode technologies and materials for use in flat panel display, solid-state lighting, and other product applications. Market cap of $1.69B. Short float at 27.22%. RSI(14) at 37.95. Net institutional shares purchased over the current quarter at 5.3M, which is 16.95% of the company's 31.27M share float. The stock is currently stuck in a downtrend, trading 11.05% below its SMA20, 23.35% below its SMA50, and 24.75% below its SMA200. The stock has had a couple of great days, gaining 8.23% over the last week.

9. DreamWorks Animation SKG Inc. (NASDAQ:DWA): Engages in the development, production, and exploitation of animated feature films and characters worldwide. Market cap of $1.39B. Short float at 24.79%. RSI(14) at 38.87. Net institutional shares purchased over the current quarter at 4.2M, which is 6.27% of the company's 67.02M share float. The stock has performed poorly over the last month, losing 10.61%.

10. Francesca's Holdings Corporation (NASDAQ:FRAN): Operates a chain of retail boutiques in the United States. Market cap of $753.24M. Short float at 26.33%. RSI(14) at 39.77. Net institutional shares purchased over the current quarter at 13.1M, which is 91.48% of the company's 14.32M share float. The stock is currently stuck in a downtrend, trading 5.27% below its SMA20, 16.29% below its SMA50, and 21.52% below its SMA200. It's been a rough couple of days for the stock, losing 6.18% over the last week.

11. Aruba Networks, Inc. (NASDAQ:ARUN): Provides distributed enterprise networks that securely connect local and remote users to corporate information technology resources worldwide. Market cap of $1.98B. Short float at 18.70%. RSI(14) at 39.82. Net institutional shares purchased over the current quarter at 10.2M, which is 10.16% of the company's 100.39M share float. The stock is currently stuck in a downtrend, trading 6.18% below its SMA20, 14.23% below its SMA50, and 26.67% below its SMA200. The stock has performed poorly over the last month, losing 12.23%.

*Institutional data sourced from Fidelity, all other data sourced from Finviz.

Source: Hedge Funds Are Buying These 11 Highly-Shorted, Oversold Stocks