10 Stocks Under Attack

Because 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 New York 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-Nov. 28

Shares Short-Nov. 14

% Change

%  Float

CAPS Rating (out of 5)

Allianz (NYSE: AZ  )

5.99

0.72

732.4%

NM

*****

Pepsi Bottling Group

2.32

0.95

143.9%

1.7%

*****

Brookfield Asset Management (NYSE: BAM  )

6.40

2.74

133%

1.1%

****

LaSalle Hotel Properties (NYSE: LHO  )

8.02

3.45

132.1%

19.9%

***

Douglas Emmett

15.29

6.83

123.9%

14.2%

*

AU Optronics (NYSE: AUO  )

11.14

5.06

120.1%

NM

*****

Corn Products International (NYSE: CPO  )

1.43

0.66

118.6%

1.9%

****

AutoZone (NYSE: AZO  )

4.30

1.99

115.7%

7.5%

**

Rohm and Haas (NYSE: ROH  )

3.72

1.77

110.4%

2.1%

***

RenaissanceRe

1.53

0.79

92%

2.5%

*****

Sources: wsj.com. Share counts in millions. NM=not meaningful.

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 experiencing short-term troubles. Only Foolish due diligence will tell you for certain; our CAPS community of more than 120,000 members offers a good place to start.

The short list
One has to imagine that with the next administration's intended plans to ramp up infrastructure projects in the country, Brookfield Asset Management will be one company to benefit, given that it owns and operates many infrastructure-related assets through a subsidiary. Moreover, because it has substantial liquidity available, Brookfield has been able to make opportunistic purchases, including its purchase of the home services unit of GMAC in October. In September, CAPS member ValueArbitrage called Brookfield a top-tier management company.

Brookfield Asset Management is a best-in-breed asset management company focused exclusively on delivering value to shareholders by producing increasing, recurring high quality free cash flow. ... BAM's basic strategy is to opportunistically [acquire] and manage long-lived assets, at reasonable prices, that generate sustainable and growing free cash flow, and finance them with cheap debt and equity financing, and manage them actively to maximize total returns. ... BAM offers investors a truly compelling opportunity for patient, long term investors.

Fixing your car instead of buying a new one may end up helping auto parts retailer AutoZone come out of the recession in better shape than when it started. Through various cost-cutting measures and inventory control procedures, AutoZone was able to beat analyst expectations on earnings last week. CAPS member ponyfan81 figures fixing it yourself will help as well.

Brakes are easier to fix than finding $400 to pay someone else to do them in this economy. Decent occupancy costs, good management, excellent balance sheet.

Don't sell yourself short
It pays to do 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!

On Jan. 12, 2009, Fool co-founder David Gardner, Jeff Fischer, and their Motley Fool Pro team will accept new subscribers to their real-money portfolio service. Motley Fool Pro is investing $1 million of the Fool's own money in long and short positions in a range of securities, including common stocks, put and call options, and exchange-traded funds (ETFs). They also incorporate proprietary CAPS "community intelligence" data into their research. To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.

Brookfield Asset Management is a Motley Fool Global Gains pick. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. There's no shortcut around the Motley Fool's disclosure policy.


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