Looking for investing ideas with the backing of sophisticated investors? Here we give you just that. The stocks listed below have met the following criteria:
Shorting a share involves borrowing the share and immediately selling it with the agreement to buy it back and return it in the future. This is profitable only if the share price drops, in which case the short-seller gets to keep the difference in value (minus a borrowing fee).
Thus, heavy short-selling indicates a bearish (or pessimistic) view on the stock's prospects. And a pullback on shorted shares means these traders are becoming more optimistic about the stock's near-term values.
Below we list names that have seen a significant decrease in shares shorted month over month -- a sign these sellers think there is more upside potential than not.
The "overweight" rating
We then screened our list for stocks Barclays, a major global financial services provider, is feeling very bullish about and has given "overweight" ratings.
Big financial firms, though certainly not always correct, put a lot of analysis into their ratings. So we can assume they have good reason for rating a company "overweight" – the highest bull rating available (versus "equal weight" or "underweight").
Business section: investing ideas
Do you think Barclays and short-sellers are correct to feel optimistic about these names? Do you think the market is undervaluing these names? Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)
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4. Tesla Motors
Interactive Chart: Press play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Rebecca Lipman does not own any of the shares mentioned above. Short data sourced from Yahoo! Finance. Ratings from Google Finance.
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