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

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 a list of stocks on the New York Stock Exchange that reported some of the largest changes in short interest positions since April. We'll turn 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-May

Shares Short-April

% Change

CAPS Rating (out of 5)

Valero (NYSE:VLO)





Regions Financial (NYSE:RF)










Altria (NYSE:MO)





Advanced Micro Devices (NYSE:AMD)





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 rated investors 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 stocks CAPS players like cross swords with those that short sellers don't.

Fools have a surprisingly good feel about these companies, although they seem a bit dour on the prospects of financial holding company Regions Financial and chip maker AMD. Both oil refiner Valero and cigarette maker Altria have top honors with five-star ratings from the CAPS community.

Perhaps short sellers are focusing on the refiner's soaring stock even though gas prices are expected to continue rising. $4 per gallon, anyone? As for Altria, the spinoff of its Kraft (NYSE:KFT) division did cause a near-$20 drop in stock price last month, so maybe they were hoping for a continued lagging performance.

I'm thinking that even with the big price drop figured in for the cigarette maker, Valero is the more interesting situation here, since demand for gas remains high, miles traveled should continue to rise (according to AAA), and there are still no new refineries being built in the United States.

More than 1,900 professional and novice investors have weighed in on the oil refiner. One-third of them are considered All-Stars, CAPS players who consistently outperform their peers. They're exceptionally bullish on the company and have been since the end of last year, as revealed by its CAPS trend. Here's what a few CAPS players had to say:

  • Top-rated CAPS player pokeytax says "Refining capacity is a lot harder to add than microchip capacity, or solar-panel capacity. Nobody is fighting over who can give Valero the biggest tax break to build a plant in their backyard, but they still all buy gasoline."
  • Niksurfs thinks Valero is a great value stock. "They take sour crude, refine it and retail it. If you want to know how important that is and going to become, stay tuned for the summer months ahead and on into 2009, it will be of paramount importance. Sweet Crude is getting scarce, which means expensive. Not many refiners have invested in the infrastructure to work with the (crappy) sour crude, and turn it into marketable fuel. VLO has it down to a science. Refiners (certain ones) are printing money now and will only get wealthier until more refineries are built. It can take 2-3 years to get approval to start building a refinery, providing you get by NIMBY."

But not every CAPS investor sees a Valero oil rush. genevaoil thinks there is a supply glut: "The oil market is over supplied. Prices will continue to drop and force OPEC to cut production. This will decrease the sour crude discount Valero has been enjoying for several years. Product margins are also being reduced due to bulging inventories."

Speak up!
You've heard from the CAPS community; now it's your time for a star turn -- tell the 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!

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. Kraft is an Income Investor recommendation. The Motley Fool has a disclosure policy.