Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Do the Shorts Know Something You Don't?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

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 profits.

These top companies on the American Stock Exchange had some of the largest percentage increase in 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.


Shares Short

Jan. 31

Shares Short

Jan. 14



CAPS Rating
(out of 5)

Rubicon Minerals (NYSE: RBY  ) 1.3 0.9 38.6% 0.6% *****
PharmAthene (NYSE: PIP  ) 3.4 3.0 14.6% 14.8% **
General Moly (NYSE: GMO  ) 2.9 2.6 13.7% 4.5% *****

Sources: Share counts in millions.

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 170,000-strong CAPS community offers just such a good place to start.

The short list
Gold miner Rubicon Minerals was one of the companies with a prodigious increase in the number of shares sold short that I profiled during the last reporting period. Now, over the course of a month, those betting against the company have nearly doubled their short position and have been rewarded after Rubicon said it was amending its technical support for the Phoenix gold project.

It was only last November that Rubicon sparked a huge rally in its shares when it filed a report showing there was an inferred gold resource of 4 million ounces at Phoenix, a huge amount that would catapult the gold miner to the head of its class. But it wasn't all that surprising either since Goldcorp (NYSE: GG  ) has found rich veins in the area, too. So when British Columbia regulatory authorities wanted Rubicon to amend its report, investors got spooked and sent its shares falling. They're down about 15% from their most recent highs.

The company isn't concerned, however, believing the amendment -- which must be filed by the expert it previously hired to write the report -- will be more technical in nature than substantive.

CAPS member jerry0924 says he thinks the Rubicon find will eventually be proved equal to Goldcorp's: "From several news post that I have read I believe Rubicon's deposits will be similar to its neighbor Gold Corp. If it is this will a very profitable stock in 2 to 4 years."

Let us know in the comments section below or on the Rubicon Minerals CAPS page whether the miner still owns a heart of gold.

No small thing
After the Small Business Administration sided with privately held Chimerix that SIGA Technologies (Nasdaq: SIGA  ) was a business "other than small," no doubt short-sellers felt emboldened to bet that it would no longer qualify for the contract the government was handing out to supply the nation's smallpox antiviral stockpile. And if SIGA was going down, the value of PharmAthene's legal claims against it would carry less value, too. Hence the rising number of short-sellers here.

To recap, the lawsuit started in 2006 after SIGA backed out of a deal to merge with PharmAthene after reporting positive results for its own research and development efforts. The merger agreement had stipulated that if the deal fell through, the two would still go ahead with a joint marketing arrangement. After SIGA tried to cut PharmAthene out, the latter sued, and following a series of judicial rulings the court case is moving forward.

Shorts were probably surprised when the government rewrote the rules to essentially guarantee SIGA will win the contract. That puts PharmAthene's award, should it prevail in court, in a more lucrative position.

CAPS members generally believe in PharmAthene. Some 86% of those rating the biotech give it the benefit of the doubt in beating the market, but you can head over to the PharmAthene CAPS page and tell us if you think there's a chance it will lose. Then add the stock to your watchlist to gather all the news about its progress.

Squeezed to death
After getting caught up in the excitement of possible rare-earth minerals shortages, investors were bidding up shares of China Shen Zhou Mining & Resources  (NYSE: SHZ  )  and China GenSheng Minerals, stocks that had no right to be trading so high. General Moly was bitten by the bug, too, and like its Chinese counterparts -- which have tumbled 30% and 45%, respectively, since the start of the year -- General Moly's stock is down more than 20%. Molycorp (NYSE: MCP  ) , another supposed rare-earth play, has declined a more modest 9% so far this year.

What should prove valuable to General Moly is the stake it owns in two molybdenum and copper mines in Nevada. If and when it gets moving on them and starts extracting the metals from the ground, it could expect to receive a handsome payoff. In the meantime, though, it might continue to lag, at least until the next mania sweeps the market.

However, as I wrote last month, it's going to be some time before we see any real developments:

General Moly doesn't even have a shovel in the ground yet, so its run-up in relation to rare-earth metals restrictions is silly. The Mt. Hope mine won't begin production until 2013 at the earliest, and Liberty won't be producing until maybe 2015. Overly optimistic sentiment surrounding rare-earth minerals has bid up GMO to unrealistic levels and it's due for a return to earth.

Add General Moly to the Fool's free portfolio tracker to stay on top of how this hope-to-be miner performs in the future.

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!

The Fool owns shares of Rubicon Minerals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mention in this article. You can see his holdings here. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1446731, ~/Articles/ArticleHandler.aspx, 10/24/2016 9:38:35 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 22 minutes ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2016 4:00 PM
GG $15.29 Down -0.22 -1.42%
Goldcorp CAPS Rating: ***
MCPIQ $0.00 Down +0.00 +0.00%
Molycorp, Inc. CAPS Rating: **
SIGAQ $0.00 Down +0.00 +0.00%
SIGA Technologies,… CAPS Rating: ****