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Do you consider yourself a contrarian investor? If you like to look for opportunity where others are pessimistic, your answer may be yes. We ran a screen with this idea in mind.

We began by searching for highly shorted stocks, with float shorts above 15% and days to cover above 10. We then screened for those that appear undervalued relative to earnings growth, with PEG ratios below 1.

Finally, we screened for those with the confidence of the smart money, with significant net institutional purchases over the last quarter, with at least 5% net institutional purchases as a percent of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to outperform.

Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

Do you agree with the smart money on these names? Use this list as a starting point for your own analysis.

List sorted by net institutional purchases as a percent of share float.

1. Constant Contact, Inc. (CTCT): Provides on-demand email marketing, social media marketing, event marketing, and online survey solutions primarily in the United States. Market cap at $852.51M. Price at $27.74. PEG at 0.98. Float short at 26.68%. Days to cover at 18.3. Net institutional purchases in the current quarter at 3.0M shares, which represents about 10.18% of the company's float of 29.48M shares.

2. Medifast Inc. (MED): Engages in the production, distribution, and sale of weight management and disease management products, and other consumable health and diet products in the United States. Market cap at $284.61M. Price at $18.24. PEG at 0.81. Float short at 27.30%. Days to cover at 15.0. Net institutional purchases in the current quarter at 835.3K shares, which represents about 6.75% of the company's float of 12.37M shares.

3. USANA Health Sciences Inc. (USNA): Develops, manufactures, distributes, and sells nutritional and personal care products worldwide. Market cap at $542.94M. Price at $35.89. PEG at 0.69. Float short at 36.73%. Days to cover at 43.0. Net institutional purchases in the current quarter at 421.8K shares, which represents about 6.1% of the company's float of 6.92M shares.

4. Bridgepoint Education, Inc. (BPI): Provides post-secondary education services. Market cap at $1.11B. Price at $19.99. PEG at 0.38. Float short at 17.44%. Days to cover at 22.7. Net institutional purchases in the current quarter at 932.0K shares, which represents about 5.4% of the company's float of 17.27M shares.

5. ITT Educational Services Inc. (ESI): Offers post-secondary degree programs in the U.S. that provide diplomas as well as associate's, bachelor's, and master's degrees. Market cap at $1.60B. Price at $62.87. PEG at 0.97. Float short at 39.00%. Days to cover at 21.4. Net institutional purchases in the current quarter at 854.6K shares, which represents about 5.09% of the company's float of 16.79M shares.

*Institutional data sourced from Fidelity, days to cover sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 5 Undervalued, Highly Shorted Stocks Being Bought Up By Hedge Funds