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 having some of the largest increases in short interest positions since May. 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)

National Semiconductor (NYSE:NSM)










Wells Fargo (NYSE:WFC)





Micron (NYSE:MU)





Motorola (NYSE:MOT)





Historical shares short data courtesy of Yahoo! Finance and author's calculations. 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, more than 31,000 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.

While most of the names here are new to the list, meaning that short sellers have found new targets to dislike, it looks like the CAPS community isn't so hot on them either. None of the companies rates better than an average three stars. Motorola, however, is also seemingly being discounted by CAPS investors, with its two-star rating.

As aaronplot notes, it "[n]eeds another breakthrough product to save it, and right now it doesn't look like there is anything in the line up. Competition is quickly overtaking MOT, Samsung is only a percentage point away from stealing the #2 spot in market share from MOT. Popularity of Razr's is beginning to fade and the stock has gone no where for 8 months. Share price will continue to stagnate unless management can drastically improve its product line and innovate more aggressively than its competitors."

While not the sporting the biggest short attack, IBM is still seen as a solid company, despite its lofty price.

One out of every five professional and novice investors that have weighed in on the cable company are considered All-Stars: CAPS players who have consistently outperformed their peers. Almost all of them have been steadily bullish on IBM since the beginning of the year. We can tell that by its CAPS trend. Here's what a few CAPS players had to say:

  • Top-rated CAPS investor DatabaseBob says "Every year since 1996, this financially-strong powerhouse has both increased its dividend and bought back shares. The current dividend is more than four times what was paid in 1995 and more than 36% of the common shares outstanding in 1994 have been retired. IBM is diversified across technologies and services, and is geographically diversified as well, with foreign sales representing 62% of the 2005 total. Sales to Brazil, Russia, India and China are increasingly coming to the fore. Although they dipped a bit in '02 and '03, profit margins have been steadily increasing over the last decade - from under 8% to over 10% - but the market hasn't seemed to give IBM enough credit for this. I think there's increasing recognition though that Blue doesn't imply melancholy."
  • poetx even finds Big Blue sexy, in a way. "This company is more diversified than most hi-tech concerns. Its hardware operations have held up in recent years as they've retooled to adapt mainframes to the internet age. Their services, which had hit a plateau of sorts after helping define the IT services market, are on the uptick again due to an emphasis on SOA (services oriented architecture). Beyond that, they have taken chip design from boring to sexy by aligning themselves with the major computer game console developers (Nintendo, Sony, etc).

    "IBM is a major component of the DOW, so it probably won't stray too far, but [it's] kind of like a mutual fund in and of itself, considering the combination of hardware, software and services it offers, and it is also geographically diversified, offering some protection during localized downturns and fluctuations in currency."

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!

Market stalwarts that have been shunned by the market have found a home at Motley Fool Inside Value. A 30-day free trial subscription is your shortcut to market-beating returns. Click here to see which ones have already been selected to profit handsomely in your portfolio.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. There's no shortcut around the Motley Fool's disclosure policy.