When the market really hates a stock, it expresses itself by selling -- and in some cases, selling short. Recently, I looked at stocks with large short positions -- at least 20% of the share float short -- and a number of apparel retailers made the list.

Given high unemployment and skittish consumers, the market's pessimism is no surprise. But is the pessimism warranted, or is it overdone, presenting a potential opportunity for long investors?

Company

Market Cap

% Float Short

Forward P/E

Price / Free Cash Flow

Buckle (NYSE: BKE) $1.6 billion 28.6% 13.1 19.0
J. Crew Group (NYSE: JCG) $2.2 billion 22.3% 13.9 12.9
Lululemon Athletica (Nasdaq: LULU) $3.4 billion 20.3% 32.9 38.2
Talbots (NYSE: TLB) $720.0 million 26.5% 9.9 50.6

Sources: Finviz.com; Yahoo! Finance.

Buckle has consistently grown profit and has lots of insider ownership. But the company's comparable-store sales have been spotty, and analysts aren't expecting robust growth from the retailer. While they're positive this fall, comparables were negative during the summer. With just some 400 stores concentrated in the Midwest, the company does have room to grow, and it pays a 2.3% dividend.

J.Crew has been a bonanza for short-sellers over the last year. The stock is down 19% year to date and has fallen more than 33% from its high, underperforming the S&P 500 and many of its retail apparel peers. The company is facing tough year-over-year comparisons for the remainder of its 2010 fiscal year. But the company has strong leadership in CEO Millard Drexler, a clean balance sheet, and a modest number of stores.

Over the last year, Lululemon's stock has been the polar opposite of J.Crew's. The company is up 75%, far outperforming the market and retail apparel peers. Lululemon's valuation is rich any way you look at it, so short-sellers must expect a big dent in share price from any hiccup in operational performance. Along with its direct sales unit, the company has 130 owned or franchised stores, fewer than many apparel retailers. But the company addresses a narrow niche -- premium-priced yoga apparel -- that is also served by competitors such as Nike (NYSE: NKE) and Under Armour (NYSE: UA).

Talbots is three years into a multiyear turnaround, and the stock is valued to reflect that. While the company has returned to profitability and deleveraged its balance sheet, growth expectations remain tepid -- analysts expect total revenue of $1.3 billion next year, 24% less than the company generated in fiscal 2008. The company's gross margins -- 38.5% over the last 12 months -- also lag those of the other specialty apparel retailers.

In my view, Buckle and J.Crew are the most interesting buying opportunities in this group, but you should do your own due diligence. If you want to keep track of these stocks, add them to your watchlist.

For more on investing in the retail sector, click here to get The Motley Fool's free report, The Death of Wal-Mart -- the Real Cash Kings Changing the Face of Retail.

Fool contributor April Taylor does not own shares of the companies 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.