Since everyone loves a winner, it's reasonable to assume that everyone hates a loser. Yet that's not always the case with investing.

Contrarian investors love to pick through stocks that others have cast away. Value investors are the garbage-divers of the marketplace. Conversely, when stocks have a big run-up, some investors like to bet against them. They're called short sellers, and they bet that a stock is primed for a fall.

What goes up must come down
Here's April's list of the Nasdaq stocks with some of the reported largest short interest positions. We've turned to the collective intelligence of the Motley Fool CAPS community to learn which of these stocks -- if any -- Foolish investors think have the power to make short work of short sellers.


Shares Short-April

Shares Short-March

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CAPS Rating






Level 3 Communications (NASDAQ:LVLT)





Charter Communications (NASDAQ:CHTR)















Five stars = highest CAPS rating; one star = lowest CAPS rating. Shares short data courtesy of Nasdaq. CAPS Rating courtesy of Motley Fool CAPS. Share counts in millions.

Of course, this isn't a list of stocks to buy -- or short! Maybe these stocks have some serious problems that warrant the high short interest. Maybe not. What do you think? Will they be squeezed?

Tapping the CAPS Advantage
Over on CAPS, nearly 29,000 investors like you are looking over these same stocks. Some they like, some they don't, and they all vote on how they feel about them. Sometimes, though, the lists of stocks that Foolish CAPS players like cross swords with those that short sellers don't.

Fools have a pretty dour opinion of these companies, although global communications services provider Level 3 piques their interest a bit. Perhaps short sellers are focusing on the restructuring that's been going on at the telecommunications carrier. A highflier just a few years back, the firm is now just scraping by, producing a series of losses. Will its wider loss in the face of greater revenues be enough to bolster and hearten the short sellers?

More than 1,200 professional and novice investors have weighed in on Level 3. Nearly 13% of them are considered All-Stars, CAPS players who consistently outperform their peers. They've been bullish on the communications company since the end of last year, as revealed by Level 3's CAPS trend. Here's what a few CAPS players had to say:

  • cyclefaster, a CAPS newcomer, says: "The world loves technology; voice, video, data and can't get enough [social] networking. Basic supply and demand. Who has the fiber and the best connected network? Level3. Demand will continue to rise and the supply will see the benefits."

  • CAPS All-Star 2much2C apparently agrees: "L3 may finally be taking advantage of all the fiber they laid in the late 90s. I worked on a lot of these projects. They installed 10-17 cables of fiber throughout most of California where I worked. At the time, 1-2 lines were being allocated. The remaining lines were to be sold to future companies. It was a great plan because not only is it expensive to lay fiber but they monopolized the communication corridors which means even if another company wanted to install fiber the jurisdictional agencies would probably not allow it since they could utilize the unused fiber in the ground."

But not every All-Star believes Level 3 is on the level. Top-rated CAPS player Malstryx says, "If its all about the video on the net, I would rather go with Akamai's technology which not only works, its profitable to boot."

Speak up!
You've heard from the CAPS All-Stars, now it's your time for a star turn. Tell the CAPS community what you have to say. Only on Motley Fool CAPS does your opinion count just as much as the short sellers'. Tell us what you think: Squeeze 'em till it hurts, or short 'em till the sun don't shine? May the best argument prevail!

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