Swift Energy (NYSE:SFY) and Penn Virginia (NYSE:PVA) are two of the most heavily shorted stocks in the energy sector. Currently 34.2% of Swift Energy's shares have been sold short while 34.1% of Penn Virginia's shares have been shorted by investors. Needless to say investors expect big drops in both stocks. 

What's intriguing about these two short ideas is the fact that both Swift Energy and Penn Virginia are focused on the Eagle Ford Shale to fuel growth. While the Eagle Ford Shale is the probably the hottest drilling play in America, investors don't think it can fuel gains for these two stocks.

One of the reasons investors are cautious on both companies is due to the aggressive use of debt to fuel drilling. However, that's not the main reason investors are betting against Swift Energy or Penn Virginia. So, to help investors better understand why these stocks are so heavily shorted I created the following slideshow presentation. It suggests which stock might be the better short candidate as well as which one could incinerate short-sellers while also providing an interesting bonus idea to keep an eye on.

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Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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