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Do you like to follow the market's outlook on a stock? One of the most telling indicators is trends in the stock's number of shares shorted.

We ran a screen on stocks that appear highly undervalued, with PEG below 1 and P/FCF below 15. We then screened for those with bullish sentiment from short sellers, with stocks seeing significant decreases in shares shorted month-over-month.

Interactive Chart: Press Play to compare changes in market cap 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 outperform like short sellers expect? Use this list as a starting point for your own analysis.

1. Bridgepoint Education, Inc. (NYSE:BPI): Provides postsecondary education services. PEG at 0.45. P/FCF at 6.93. Shares shorted have decreased from 9.70M to 9.09M over the last month, a decrease which represents about 3.57% of the company's float of 17.11M shares.

2. Capital One Financial Corp. (NYSE:COF): Operates as the bank holding company for the Capital One Bank, National Association and Capital One, National Association, which provide various financial products and services in the United States, Canada, and the United Kingdom. PEG at 0.86. P/FCF at 3.61. Shares shorted have decreased from 27.10M to 7.62M over the last month, a decrease which represents about 4.33% of the company's float of 450.31M shares.

3. Coinstar Inc. (CSTR): Provides automated retail solutions primarily in the United States, Canada, Puerto Rico, the United Kingdom, and Ireland. PEG at 0.96. P/FCF at 8.1. Shares shorted have decreased from 10.11M to 8.40M over the last month, a decrease which represents about 5.7% of the company's float of 29.99M shares.

4. Ebix Inc. (NASDAQ:EBIX): Provides on-demand software and e-commerce solutions to the insurance industry. PEG at 0.9. P/FCF at 12.75. Shares shorted have decreased from 10.06M to 9.65M over the last month, a decrease which represents about 1.18% of the company's float of 34.64M shares.

5. Marathon Petroleum Corporation (NYSE:MPC): Engages in refining, transporting, and marketing petroleum products primarily in the United States and internationally. PEG at 0.64. P/FCF at 7.46. Shares shorted have decreased from 8.79M to 4.90M over the last month, a decrease which represents about 1.12% of the company's float of 346.39M shares.

6. Valassis Communications Inc. (NYSE:VCI): Operates as a media and marketing services company primarily in the United States. PEG at 0.77. P/FCF at 5.73. Shares shorted have decreased from 7.53M to 7.10M over the last month, a decrease which represents about 1.03% of the company's float of 41.87M shares.

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

Source: 6 Highly Undervalued Stocks With Strong Short Covering