10 Stocks Under Attack

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Since everyone loves a winner, it's reasonable to assume that everyone hates a loser -- everyone but short-sellers, at least. These contrarian investors bet that hot stocks are primed to fall, aiming to turn their pessimism into potential profits.

This week, let's look at companies on the Nasdaq with the shares short representing the largest percentage of a company's float. Combining that with the collective intelligence of Motley Fool CAPS, we'll see which of these companies Fools believe have the power to make short work of short-sellers.

Company	Shares Short-Aug. 29	Shares Short-Aug. 15	% Change	% of Float*	CAPS Rating (out of 5)
Conns	6.9	7.0	(1.79%)	152.8%	****
Acura Pharmaceuticals (Nasdaq: ACUR)	0.8	0.8	1.50%	126%	*
Jos. A. Bank Clothiers (Nasdaq: JOSB)	17.4	15.2	14.50%	106.3%	****
Cal-Maine Foods (Nasdaq: CALM)	12.8	14.1	(9.11%)	100.5%	****
Corus Bankshares (Nasdaq: CORS)	22.0	22.5	(2.24%)	72.9%	*
NutriSystem (Nasdaq: NTRI)	17.8	17.4	2.01%	70.2%	***
Blue Nile (Nasdaq: NILE)	8.1	8.0	1.00%	57.8%	***
NetLogic Microsystems	10.1	10.1	(0.70%)	56.7%	**
True Religion Apparel (Nasdaq: TRLG)	12.5	11.3	10.02%	55.3%	**
WebMD	4.8	5.0	(3.68%)	55.1%	*

Sources: wsj.com. Share counts in millions. *Shares outstanding, minus shares controlled by insiders, restricted stock, and shares held by 5% owners.

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 short-term troubles. Only Foolish due diligence will tell you for certain; our 115,000-strong CAPS community offers a good place to start.

The short list
In the month since egg producer Cal-Maine appeared on this list showing that its shares short exceeded the entire float, the number of shares being shorted has declined by about 1 million, but still suggests that the entire float of the stock -- that is, all the shares available to trade -- are sold short. That seems highly unlikely, and it appears to underscore the idea that naked shorting is still alive and well. While such situations can lead to a short squeeze, CAPS members like bertust are more focused on how Cal-Maine stands out.

Cal-Maine is executing brilliantly. They've made smart acquisitions at good prices (note the low amount of goodwill on the balance sheets) and their profits have grown in the face of high feed prices. This is a well run company with lots of room to run yet.

Conversely, CAPS member cashsage says he thinks Corus Bankshares has one of the most illiquid balance sheets out there.

[Corus] is also one of the U.S. banks with the most illiquid balance sheet. It is craving for a cash recapitalisation as it is the bank with the highest 1Y CD rate as per Bankrate.com today.

While insider sales are generally viewed as a non-event around here -- insider purchases tend to be more significant -- it's not always the case, and CAPS member BetterBizBooks thinks that's how it is with True Religion. With an economy that's in even worse shape than previously thought, there's reason to suspect that a company selling $300 jeans will have some problems.

CEO DUMPING shares. 2 million out of 5 million according to one blog I read. As late as last week apparently... I can't see demand for $300 pair of jeans staying strong given that the economy is weakening EVEN FURTHER than what we saw earlier this year.

Don't sell yourself short
It pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Then share your views with the CAPS community: Squeeze 'em till it hurts, or short 'em till the sun don't shine? May the best argument prevail.