Since everyone loves a winner, it's reasonable to assume that everyone hates a loser -- everyone except short-sellers, at least. These contrarian investors bet that hot stocks are primed to fall, aiming to turn their pessimism into profits.
This week, let's look at companies on the New York Stock Exchange with the number of shares short representing the largest percentage of the company's float. Combining that with the collective intelligence of Motley Fool CAPS, we'll see which of these firms Fools believe have the power to make short work of short-sellers.
|
Company
|
Shares Short-July 15
|
Shares Short-June 30
|
% Change
|
% of Float^
|
CAPS Rating
(5 max)
|
|
FirstFed Financial (NYSE: FED )
|
8.9
|
9.5
|
(6.06%)
|
76.5%
|
*
|
|
Pzena Investment Management
|
4.4
|
4.1
|
5.30%
|
71.6%
|
NR
|
|
Beazer Homes (NYSE: BZH )
|
24.4
|
25.1
|
(2.96%)
|
67%
|
*
|
|
Life Time Fitness
|
21.3
|
20.0
|
6.74%
|
61.6%
|
**
|
|
Hovnanian (NYSE: HOV )
|
29.1
|
28.0
|
3.80%
|
57.8%
|
*
|
|
Greenhill & Co. (NYSE: GHL )
|
8.1
|
8.2
|
(1.15%)
|
57.4%
|
*****
|
|
MarineMax (NYSE: HZO )
|
9.6
|
9.3
|
3.66%
|
56.5%
|
*
|
|
Under Armour (NYSE: UA )
|
17.1
|
15.5
|
9.95%
|
53.8%
|
****
|
|
Tempur-Pedic (NYSE: TPX )
|
34.1
|
34.7
|
(1.86%)
|
53.5%
|
***
|
Sources: wsj.com. Share counts in millions.
^Shares outstanding, minus shares controlled by insiders, restricted stock, and shares held by 5% owners. NR = not rated.
Of course, this isn't a list of stocks to buy -- or short! These stocks could have serious problems that warrant their short interest, but they might also be stricken by only short-term troubles. Only Foolish due diligence will tell you for certain; our 110,000-person-strong CAPS community offers a good place to start your research.
Underneath it all
Under Armour's shares are up more than 10% since the maker of sweat-wicking T-shirts reported surprising earnings results that saw sales rise 30% and profits come in three times higher than what analysts predicted, albeit lower than last year.
CAPS member TheBiggestD might have been onto something when penning this bullish pitch noting the prevalence of Under Armour logos:
This will be a sentimental pick. My 7yr old just started pee-wee football. I remember a time when every inch of our kids was covered in the Nike Swoosh, be it shoes, clothing, jerseys, etc. That trend has changed and I now see a domination of the [Under Armour] on shoes, clothing and gear. P/E unfavorable, but like I said, this one's going to be sentimental. Maybe not a true view of market trend, but I have a hunch.
Tearing it down
Sometimes an investor will grasp onto any available straw in hopes that it's the thread of the silver lining. Such might have been the case the other day when homebuilder stocks surged on the glimmer of relief found in the otherwise dour S&P/Case-Shiller index, which said some cities weren't as bad as others at a time when the index was falling at its worst rate since 2001.
Beazer Homes hasn't had many things occurring to give investors joy these days, and CAPS member SwordAgain thinks more bad news is a-comin': "Likely to experience further credit downgrades and more default notices. Legal expenses will rise in anticipation of fraud investigations."
Speak up
You've heard from the CAPS community; now it's your turn to have your say: Squeeze 'em til it hurts, or short 'em til the sun don't shine? May the best argument prevail!
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