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Do you like to follow the buying trends of smart money institutional investors? We ran a screen with that idea in mind.

We began by screening for stocks trading under $5 a share with bearish sentiment, with float shorts above 10%.

We then screened for those with bullish sentiment from institutional investors, with significant net institutional purchases over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to outperform into the future.

For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

Tool provided by Kapitall. More investing ideas on Kapitall Wire.

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 net institutional purchases as a percent of share float.

1. Sealy Corporation (NYSE:ZZ): Manufactures and markets various bedding products. Market cap at $185M, most recent closing price at $1.78. Float short at 14.99%. Net institutional purchases in the current quarter at 47.8M shares, which represents about 132.19% of the company's float of 36.16M shares.

2. XOMA Corporation (NASDAQ:XOMA): Engages in the discovery, development, and manufacture of therapeutic antibodies to treat inflammatory, autoimmune, infectious, and oncological diseases. Market cap at $223.3M, most recent closing price at $3.28. Float short at 12.60%. Net institutional purchases in the current quarter at 29.5M shares, which represents about 74.59% of the company's float of 39.55M shares.

3. Green Plains Renewable Energy, Inc. (NASDAQ:GPRE): Engages in the production, marketing, and distribution of ethanol and related distillers grains in the United States. Market cap at $122.5M, most recent closing price at $4.13. Float short at 17.65%. Net institutional purchases in the current quarter at 5.1M shares, which represents about 21.3% of the company's float of 23.94M shares.

4. Celldex Therapeutics, Inc. (NASDAQ:CLDX): Engages in the development, manufacture, and commercialization of targeted immunotherapies that prevent or treat specific forms of cancer, autoimmune disorders, and diseases caused by infectious organisms. Market cap at $284.3M, most recent closing price at $4.84. Float short at 10.95%. Net institutional purchases in the current quarter at 11.9M shares, which represents about 20.34% of the company's float of 58.51M shares.

5. Mitek Systems Inc. (NASDAQ:MITK): Develops, sells, and services software solutions related to mobile imaging applications and intelligent recognition software in the United Stats and Internationally. Market cap at $115.49M, most recent closing price at $4.52. Float short at 30.05%. Net institutional purchases in the current quarter at 4.1M shares, which represents about 19.94% of the company's float of 20.56M shares.

6. RAIT Financial Trust (NYSE:RAS): Operates as a self-managed and self-advised real estate investment trust (REIT). Market cap at $236.53M, most recent closing price at $4.74. Float short at 10.67%. Net institutional purchases in the current quarter at 6.6M shares, which represents about 16.05% of the company's float of 41.13M shares.

7. Oncothyreon Inc (NASDAQ:ONTY): Focuses on the development of therapeutic products for the treatment of cancer. Market cap at $257.09M, most recent closing price at $4.50. Float short at 17.97%. Net institutional purchases in the current quarter at 7.5M shares, which represents about 15.01% of the company's float of 49.98M shares.

8. Quicksilver Resources Inc. (NYSE:KWK): Engages in the exploration, development, and production of unconventional natural gas onshore in North America. Market cap at $744.8M, most recent closing price at $4.30. Float short at 27.32%. Net institutional purchases in the current quarter at 13.4M shares, which represents about 14.77% of the company's float of 90.70M shares.

9. MannKind Corp. (NASDAQ:MNKD): Focuses on the discovery, development, and commercialization of therapeutic products for diabetes and cancer. Market cap at $367.53M, most recent closing price at $2.19. Float short at 24.02%. Net institutional purchases in the current quarter at 11.2M shares, which represents about 14.06% of the company's float of 79.64M shares.

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

Source: 9 Highly Shorted Stocks Under $5 Being Bought By Hedge Funds