The short interest in stocks within the S&P Small-Cap 600 index has risen from 5.4% of total outstanding shares at the end of 2020 to 6.1% recently. Short interest for large-cap stocks in the S&P 500 has stayed below 2% of shares outstanding, according to FactSet. Barron's analyzed stocks with high short interest, focusing on those with consensus target prices—average projections from at least 10 analysts—that are more than 10% higher than their current levels. Many of these stocks are perceived as beaten-down, and Wall Street believes they are oversold, anticipating a potential rebound in their prices.

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