Top 10 Short-Seller Targets in the S&P 500 Index

We've heard a number of analysts predict sunnier days in 2012, so it's almost refreshing to hear Albert Edwards, respected bearish strategist at Societe Generale, share his "doomsday" predictions.

Edwards is a notoriously bearish man. He was even featured in the New York Times as a "Permabear" in August 2010.

At a Societe Generale's annual strategy seminar titled "2012: The Final Year of Pain and Disappointment," he told investors he feels the U.S. is on the brink of another recession.

According to The Economist's Buttonwood, who was present at the event, Edwards is pessimistic "despite the recent signs of optimism in the data (the non-farm payrolls, for example)."

Edwards also says there will likely be a hard landing in China in 2012 because it does not have the financial abilities to stimulate its rapidly slowing economy. "It is hard to think 2013 and onwards will be any worse than this year if China hard-lands."

Business section: Investing ideas
Do you agree with Edwards' bearish views? If you do, the following list might be of interest to you.

We collected data on short sales, and identified the S&P 500 that are being targeted by short-sellers (i.e., investors that try and profit from a decline in stock prices).

This is significant, especially when you consider that short-sellers tend to be more sophisticated investors (due to the fact that they require strict credit approval to perform these trades). So if these investors are turning bearish on a stock, it's worth paying close attention.

Short-sellers think these S&P 500 stocks are in trouble -- do you agree? List sorted by short ratio. (Click here to access free, interactive tools to analyze these ideas.)

1. Express Scripts: Provides a range of pharmacy benefit management (PBM) services in North America. The company's short float stands at 16.42%, which is equivalent to 11.72 days of average trading volume.

2. GameStop (NYSE: GME  ) : Operates as a retailer of video game products and personal computer (PC) entertainment software. The company's short float stands at 29.91%, which is equivalent to 11.68 days of average trading volume.

3. Pitney Bowes: Provides mail processing equipment and integrated mail solutions worldwide. The company's short float stands at 15.63%, which is equivalent to 11.09 days of average trading volume.

4. SUPERVALU (NYSE: SVU  ) : Operates retail food stores in the United States. The company's short float stands at 24.45%, which is equivalent to 9.08 days of average trading volume.

5. J. C. Penney (NYSE: JCP  ) : J. C. Penney Company,, through its subsidiary, J. C. Penney Corporation,, operates department stores in the United States and Puerto Rico. The company's short float stands at 17.06%, which is equivalent to 7.92 days of average trading volume.

6. Expedia: Operates as an online travel company in the United States and internationally. The company's short float stands at 18.58%, which is equivalent to 7.16 days of average trading volume.

7. Lennar: Operates as a home builder and provider of financial services in the United States. The company's short float stands at 20.41%, which is equivalent to 5.28 days of average trading volume.

8. First Solar (Nasdaq: FSLR  ) : First Solar, manufactures and sells solar modules using a thin-film semiconductor technology. The company's short float stands at 35.48%, which is equivalent to 4.68 days of average trading volume.

9. Urban Outfitters: Operates lifestyle specialty retail stores under the Urban Outfitters, Anthropologie, Free People, Terrain, Leifsdottir, and BHLDN brands. The company's short float stands at 16.55%, which is equivalent to 4.64 days of average trading volume.

10. AK Steel Holding (NYSE: AKS  ) : Produces flat-rolled carbon, stainless, and electrical steels, and tubular products primarily in the United States and internationally. The company's short float stands at 22.69%, which is equivalent to 2.82 days of average trading volume.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.


List compiled by Eben Esterhuizen, CFA. Kapitall's Eben Esterhuizen does not own any of the shares mentioned above. Rebecca owns shares of FSLR. Data sourced from Finviz.

The Motley Fool owns shares of GameStop, First Solar, and SUPERVALU. Motley Fool newsletter services have recommended buying shares of First Solar. Motley Fool newsletter services have recommended writing covered calls in GameStop. Motley Fool newsletter services have recommended buying calls in SUPERVALU. 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. The Motley Fool has a disclosure policy.


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