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.
However, now that the SEC's ban on short-selling has come to an end, some will undoubtedly be tempted to blame the market's broad declines it has experienced in recent days on renewed short attacks. That's a dubious conclusion, but nevertheless, we'll take a look this week at companies on the American Stock Exchange with the largest percentage of their available shares -- also known as a company's float -- sold short.
Combining that with the collective intelligence of Motley Fool CAPS, we'll see which of these firms Fools believe still have the power to make short work of short-sellers.
|
Company |
Shares Short-Sep 30 |
Shares Short-Sep 15 |
% Change |
% of Float |
|
|---|---|---|---|---|---|
|
Orleans Homebuilders |
2.10 |
2.13 |
(1.5%) |
43.3% |
* |
|
GreenHunter Energy |
0.68 |
0.61 |
10.2% |
30.2% |
**** |
|
Cheniere Energy |
13.01 |
14.89 |
(12.6%) |
27.6% |
** |
|
Interoil |
6.56 |
11.06 |
(40.7%) |
26.5% |
* |
|
American Apparel |
6.70 |
7.25 |
(7.5%) |
23.6% |
** |
|
Ener1 |
8.80 |
8.41 |
4.7% |
22.4% |
* |
|
Apex Silver Mines |
8.65 |
10.05 |
(14.0%) |
18.2% |
*** |
|
Imergent |
1.35 |
1.15 |
16.8% |
17.4% |
* |
|
Tri-Valley |
3.33 |
3.54 |
(5.8%) |
15.1% |
* |
|
Northern Oil and Gas |
2.89 |
2.83 |
2.1% |
14.7% |
*** |
Sources: wsj.com. Share counts in millions.
Of course, this isn't a list of stocks to buy -- or short! These stocks could have serious problems that warranted their short interest, but they might also be stricken by short-term troubles. Only Foolish due diligence will tell you for certain; our 115,000-strong CAPS community offers just such a good place to start.
The short list
The credit crisis has been having an impact on liquefied natural gas projects half a world away in Papua New Guinea, according to Interoil. Its venture there was originally expected to start exporting LNG by 2012, but the company has pushed its timetable back to 2013 or 2014. Yet the delays, caused at least in part by the current credit crunch, have at least one analyst suspecting that they will result in a tight supply market for the next 15 years.
It might be situations like this that caused CAPS member Zeti to express doubts about Interoil's viability back in August.
I have trouble sharing some of the shareholders enthusiasm with this company. Same old story, same old song. Too much debt and problems, no basis for future if the past is anything to go by.
Although Interoil is expecting its new Antelope-1 well to confirm existence of sufficient reserves, delays might put the stock behind the eight ball. ExxonMobil
No silver lining
Along with the collapse in oil and gas prices, commodities have fallen as well. The market's volatility has played havoc with the price of gold and silver, and as investors in Apex Silver Mines might note, mining companies have sometimes fared even worse than the value of the metal they've dug out of the earth. Apex shares traded as high as $21 at the beginning of the year but are now valued below $2 a stub.
Even proponents of Apex like CAPS member kmj80 admit the company has shaky financials, and top-rated CAPS All-Star TheParadox said last month that its negative shareholder equity made it a worthwhile short candidate. Another top CAPS All-Star, EverydayInvestor, agrees that it has been a pretty rough ride for shareholders. The short-sellers have certainly had the right call here so far.
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!
In the coming weeks, Fool co-founder David Gardner and his Motley Fool Pro team will invest $1 million in a portfolio designed to help you make money in any market. The service, which just launched, will rely heavily on proprietary CAPS “community intelligence” data to establish long and short positions in a broad range of securities, including common stocks, publicly traded put and call options, and exchange-traded funds (ETFs). To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.
