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.
These top companies on the Nasdaq stock exchange with the largest percentage increases in shares 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 June 15
|
Shares Short May 31
|
% Change
|
% Float
|
CAPS Rating (out of 5)
|
| ValueVision Media (Nasdaq: VVTV ) |
2.3 |
0.7 |
233.1% |
6.2% |
* |
| Identive Group (Nasdaq: INVE ) |
2.7 |
1.0 |
178.2% |
6.1% |
***** |
| Hanmi Financial (Nasdaq: HAFC ) |
10.3 |
4.4 |
135.8% |
7.3% |
* |
Source: 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 warrant their short interest, but they might also be stricken by short-term troubles. Only Foolish due diligence will tell you for certain; our 180,000-strong CAPS community offers just such a good place to start.
The short list
If I let my wife loose in a mall for a 24-hour shopping spree, I'm sure I'd earn her undying love. Of course she could do that anyway from the comfort of our living room using the home shopping channels run by HSN (Nasdaq: HSNI ) or ValueVision Media, which runs a 24-hour shopping network, but so far I've been spared that particular budget-busting trauma.
Through an exclusive arrangement with ShopNBC, a division of Comcast (Nasdaq: CMCSA ) , ValueVision offers couch potatoes the chance to shop till they drop -- or fall asleep. And since she's not much of a computer person, she hasn't discovered ValueVision's ShopNBC.tv online store, let alone the joy of browsing Amazon.com's virtual aisles.
This is surprising because with her taste for jewelry and watches, she would seem a prime target consumer for ValueVision, which derives more than half of its revenues from that segment. Then again, she's a bit of a fashion snob, meaning if she can't overpay for a Marc Jacobs watch or a Louis Vuitton bag, she'd just as rather not buy it.
ValueVision targets more of a mass consumer market as evidenced by its home and electronic gadgets making up almost another third of its revenues. Beauty, health, fitness, and fashion round out the rest of its product line. And with its stock having quadrupled in value over the past year, it seems to have struck a chord with many consumers but also brought it to the attention of short sellers who perhaps think it has come too far.
Yet three quarters of the CAPS members rating ValueVision see it as still having the ability to beat the market. At just 15 times forward earnings estimates and comparing it to its growth prospects, there might still be a few more shoppers willing to tune in.
Let us know in the comments section below or on the ValueVision Media CAPS page if you think it can channel surf to greater growth.
Severing the link
Maybe it's Google's (Nasdaq: GOOG ) entry into the field with its Wallet and Offers services that has short-sellers lining up to take Identive Group down, but what it should show is that near-field communications is only going to get bigger -- and Identive can be a leader.
Google's mobile payment plan -- it says "your phone will be your wallet" -- is teaming up with MasterCard, Macy's, Subway, and others as it estimates 150 million smartphones will be enabled with NFC capabilities. That syncs with Juniper Research, which says NFC purchases could reach $670 billion by 2015, up from $240 billion this year.
Identive recently launched an online NFC marketplace where business can get tags for Google's Places program, readers, software development, and more. Look for NXP Semiconductors (NYSE: NXPI ) to try and develop a bigger leadership position, too.
CAPS member Kamale sees Identive being every bit as much of a winner as NXP in near-field communications:
They are part of the NXPI technology world. Forerunners in their field of expertise. Another Rule Breaker stepping on the advanced technology field.
Add Identive to your watchlist if you're interested in learning more about its progress as well as getting closer to the opinions of other investors on the Identive Group CAPS page.
Broken promises
It's been a tough road back. After plans to be taken over by South Korea's biggest financial services institution fell through, Hanmi Financial went from looking like it would succumb to a federal takeover to aggressively raising capital and deleveraging its balance sheet. After building up its core deposits, Hanmi returned to profitability in the second quarter with earnings of $0.05 a share compared with a loss of $0.57 a share last year.
While it pulled a secondary offering from the market because conditions weren't ripe, Hanmi says the offering was fully subscribed, underscoring the turnaround it achieved. The stock is still down 10% from a year ago, but it's 42% above its low point. Short sellers either were counting on earnings not being so good or that its ascent would stall.
Deposit your thoughts on the Hanmi Financial CAPS page and add it to your watchlist to keep tabs on who might be interested in it 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!
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