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 we'll take a look at companies on the Nasdaq stock exchange with the largest percentage increase in the number of shares sold short. 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
|
Shares Short
|
% Change |
% Float |
CAPS Rating
|
|---|---|---|---|---|---|
|
Bucyrus International |
9.5 |
3.4 |
175.4% |
12.8% |
**** |
|
Joy Global |
8.8 |
3.8 |
128.5% |
8.2% |
***** |
|
People's United Financial |
15.7 |
7.0 |
123.2% |
4.6% |
*** |
|
Morningstar |
2.5 |
1.3 |
93.6% |
13.7% |
***** |
|
Anadigics |
5.0 |
2.6 |
89.9% |
8.2% |
**** |
|
Fuel Systems Solutions |
2.6 |
1.4 |
87.2% |
21.3% |
** |
|
Philadelphia Consolidated Holding |
1.1 |
0.6 |
84.2% |
3.1% |
***** |
|
Comcast |
96.1 |
52.9 |
81.5% |
5% |
** |
|
Cincinnati Financial |
4.1 |
2.3 |
77.6% |
2.8% |
***** |
|
Axsys Technologies |
1.1 |
0.6 |
76.3% |
11.2% |
**** |
Source: wsj.com. Share counts in millions.
Of course, this isn't a list of stocks to buy -- or short! These stocks could have serious problems that warranted their short interest, but they might also be stricken by short-term troubles. Only Foolish due diligence will tell you for certain; our 120,000-strong CAPS community offers a good place to start.
The short list
Going from gasoline-powered cars to some alternative-fuel vehicles will be more of a gradual switch that a radical departure. Hybrid vehicles are one step in that evolution, as are the components that Fuel System Solutions produces to allow cars to run on propane or natural gas. CAPS member Jonock thinks change will be arriving soon for alternative-fuel companies. Fuel Systems raised revenue and operating profit margin guidance for the rest of this year, so the change might be on its way. Jonock writes:
One day we will embrace alternate fuels and when we do Fuel Systems will have its day. When the new administrations starts pushing green that day will be nearer than it was. It is holding up well in the economic explosion.
Energy concerns have also rattled coal stocks, many of which have fallen 75% or more from their highs. Slack demand from steel mills, which use coal, has been weighing on shares, spilling over into mining equipment manufacturers like Joy Global. Yet CAPS member brentvoss finds hope in a report suggesting coal will be the fuel of choice for heating for decades to come, which means continued need for Joy Global's machines to extract it:
EIA says coal will remain the electricity generating fuel of choice through 2030. Our dependence will only increase as demand for power grows and China and India continue to step up usage. [Joy Global] is the picks and shovels of the industry.
Market volatility and uncertainty can also work to your advantage when investors find they need to turn to a reliable source for information. Motley Fool Stock Advisor selection Morningstar has long been associated with mutual-fund ratings, but the company also offers a wealth of data, information, and analysis for stocks. CAPS member KokueiOTD finds its reliability reassuring:
Morningstar has a lot of things going for it. Good management, lots of cash and little debt, and a good product that more and more investors are going to turn to for information in this time of financial uncertainty. Best of all, fear has beaten the price down to a very attractive level.
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!
