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Do you like searching for potential short squeezes? One idea is to find highly shorted stocks that may be undervalued.

We ran a screen on the tech sector for stocks that are being highly shorted, with float shorts above 10%. We then screened these names to find those that appear undervalued relative to EPS trends.

Based on the assumption that P/E is equal to a constant k, increases in EPS should be matched by proportionate increases in price. When they don't match up, a mispricing may have occurred.

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 stocks will see a short squeeze? Use this list as a starting point for your own analysis.

1. Aruba Networks, Inc. (NASDAQ:ARUN): Provides distributed enterprise networks that securely connect local and remote users to corporate information technology resources worldwide. Float short at 18.62%. The EPS estimate for the company's current year increased from 0.63 to 0.64 over the last 30 days, an increase of 1.59%. This increase came during a time when the stock price changed by -0.47% (from 23.51 to 23.4 over the last 30 days).

2. Comtech Telecommunications Corp. (NASDAQ:CMTL): Designs and produces a wide range of telecom systems and services. Float short at 13.21%. The EPS estimate for the company's current year increased from 1.29 to 1.34 over the last 30 days, an increase of 3.88%. This increase came during a time when the stock price changed by 1.74% (from 32.71 to 33.28 over the last 30 days).

3. Cepheid (NASDAQ:CPHD): Develops, manufactures, and markets integrated systems for testing in the clinical market, as well as for application in legacy biothreat, industrial, and partner markets. Float short at 10.57%. The EPS estimate for the company's current year increased from 0.22 to 0.24 over the last 30 days, an increase of 9.09%. This increase came during a time when the stock price changed by -2.4% (from 43.84 to 42.79 over the last 30 days).

4. Entropic Communications, Inc. (NASDAQ:ENTR): Designs, develops, and markets systems solutions to enable connected home entertainment. Float short at 14.24%. The EPS estimate for the company's current year increased from 0.51 to 0.52 over the last 30 days, an increase of 1.96%. This increase came during a time when the stock price changed by -11.94% (from 7.2 to 6.34 over the last 30 days).

5. Research In Motion Limited (RIMM): Designs, manufactures, and markets wireless solutions for the worldwide mobile communications market. Float short at 12.57%. The EPS estimate for the company's current year increased from 4.13 to 4.16 over the last 30 days, an increase of 0.73%. This increase came during a time when the stock price changed by -9.46% (from 14.9 to 13.49 over the last 30 days).

6. Travelzoo Inc. (NASDAQ:TZOO): Publishes travel and entertainment offers from various travel and entertainment companies in North America and Europe. Float short at 73.95%. The EPS estimate for the company's current year increased from 1.54 to 1.55 over the last 30 days, an increase of 0.65%. This increase came during a time when the stock price changed by -6.19% (from 25.7 to 24.11 over the last 30 days).

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

Source: 6 Highly Shorted Tech Stocks Undervalued By EPS Trends