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Do you look for contrarian opportunities in the market? If so, we have screen for you. We began by screening for financial stocks with bearish sentiment, with float shorts above 10%. We then screened for stocks that may be undervalued by comparing price trends to changes in EPS estimates over the last month.

Based on the assumption that P/E is equal to a constant k, increases in EPS should be matched by increases in price. When they don't match up, a mispricing may have occurred. We screened for stocks with faster growth in EPS estimates than price over the last month, which may indicate that these names are being undervalued.

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

(click to enlarge)

Tool provided by Kapitall.

Do you think these stocks are on the verge of a short squeeze? Use this list as a starting point for your own analysis.

List sorted by increase in EPS estimate over the last year.

1. Stewart Information Services Corp. (NYSE:STC): Provides title insurance and related information services required for settlement by the real estate and mortgage industries. Market cap at $348.3M, most recent closing price at $18.0. Float short at 11.34%. The EPS estimate for the company's current year increased from $0.68 to $0.87 over the last 30 days, an increase of 27.94%. This increase came during a time when the stock price changed by 12.29% (from $15.62 to $17.54 over the last 30 days).

2. PHH Corporation (NYSE:PHH): Provides mortgage and fleet management outsourcing services in the United States and Canada. Market cap at $1.01B, most recent closing price at $17.91. Float short at 17.20%. The EPS estimate for the company's current year increased from $2.32 to $2.5 over the last 30 days, an increase of 7.76%. This increase came during a time when the stock price changed by -8.12% (from $17.36 to $15.95 over the last 30 days).

3. BancorpSouth, Inc. (NYSE:BXS): Operates as the holding company for BancorpSouth Bank that provides commercial banking and financial services to individuals, and small-to-medium sized businesses in Mississippi, Tennessee, Alabama, Arkansas, Texas, Louisiana, Florida, Missouri, and Illinois. Market cap at $1.37B, most recent closing price at $14.46. Float short at 10.56%. The EPS estimate for the company's current year increased from $0.84 to $0.9 over the last 30 days, an increase of 7.14%. This increase came during a time when the stock price changed by -2.3% (from $14.81 to $14.47 over the last 30 days).

4. Artio Global Investors Inc. (NYSE:ART): A publicly owned asset management holding company. Market cap at $197.47M, most recent closing price at $3.32. Float short at 10.50%. The EPS estimate for the company's current year increased from $0.16 to $0.17 over the last 30 days, an increase of 6.25%. This increase came during a time when the stock price changed by -2.06% (from $3.39 to $3.32 over the last 30 days).

5. Texas Capital BancShares Inc. (NASDAQ:TCBI): Operates as the holding company for Texas Capital Bank, National Association that provides various banking products and services for commercial and high net worth customers in Texas. Market cap at $1.76B, most recent closing price at $43.98. Float short at 13.67%. The EPS estimate for the company's current year increased from $2.82 to $2.98 over the last 30 days, an increase of 5.67%. This increase came during a time when the stock price changed by 4.68% (from $41.64 to $43.59 over the last 30 days).

6. World Acceptance Corp. (NASDAQ:WRLD): Engages in small-loan consumer finance business. Market cap at $955.42M, most recent closing price at $73.10. Float short at 33.46%. The EPS estimate for the company's current year increased from $7.9 to $8.31 over the last 30 days, an increase of 5.19%. This increase came during a time when the stock price changed by 5.14% (from $67.27 to $70.73 over the last 30 days).

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

Source: 6 Highly Shorted Financial Stocks Undervalued By EPS Trends