3 Highly Shorted Stocks Under $5 Bought Up By Hedge Funds

Tickers in this article: FST MNKD PVA

Do you like to follow the buying trends of smart money institutional investors? We created a stock list with that��idea in mind. [More Investing Ideas:��Hedge Funds Are Buying 3 Rallying Technology Dividend Stocks] We began by screening for stocks trading under $5 a share with bearish sentiment, with float shorts above 10%. High float short is a sign of bearish sentiment among short sellers, who benefit when share price falls. We further screened for increase in shares shorted month over month, a sign that bearish sentiment is still escalating.�� Then, for a contrarian edge, we 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.�� If hedge funds are correct in their optimism, short sellers might be forced to cover their short positions quickly as share prices rise, lending possibility to a short squeeze, which sends price even higher.�� For an interactive version of this chart, click on the image below. Tool provided by Kapitall. Login to access free research tools, share practice portfolios, and more. <p>Your browser does not support iframes.</p> <p> Short sellers are pessimistic about future stock price while institutional investors are bullish. ��Do you think hedge funds are calling it right on these names? Use this list as a starting point for your own analysis. 1. Forest Oil Corp. (FST): Engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids primarily in North America. Market cap at $565.58M, most recent closing price at $4.74. Float short: 17.51%. Net institutional purchases in the current quarter at 6.4M shares, which represents about 7.38% of the company's float of 86.76M shares. Shares shorted have increased from 19.05M to 20.82M over the last month, an increase which represents about 2.04% of the company's float of 86.76M shares. Days to cover ratio at 5.7 days. 2. MannKind Corp. (MNKD): Focuses on the discovery, development, and commercialization of therapeutic products for diabetes and cancer. Market cap at $1.09B, most recent closing price at $3.76. Float short: 19.49%. Net institutional purchases in the current quarter at 13.2M shares, which represents about 8.67% of the company's float of 152.29M shares. Shares shorted have increased from 32.13M to 40.10M over the last month, an increase which represents about 5.23% of the company's float of 152.29M shares. Days to cover ratio at 9.4 days. 3. Penn Virginia Corporation (PVA): Engages in the exploration, development, and production of natural gas and oil in various domestic onshore regions of the United States, including Texas, Appalachia, the Mid-Continent, and Mississippi. Market cap at $226.28M, most recent closing price at $4.10.��Float short: 18.87%.�� Net institutional purchases in the current quarter at 11.9M shares, which represents about 21.9% of the company's float of 54.35M shares. Shares shorted have increased from 9.39M to 10.34M over the last month, an increase which represents about 1.75% of the company's float of 54.35M shares. Days to cover ratio at 6.55 days. (List compiled by RYAN HORCH and REBECCA LIPMAN, KAPITALL Editors)