Do the Shorts Know Something You Don't?

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.

These top companies on the Nasdaq exchange had some of the largest percentage increase in shares sold short. Combining that with the collective intelligence of Motley Fool CAPS, we'll see which of these companies Fools believe have the power to make short work of short-sellers.

Sources: wsj.com. Share counts in millions. NM = not meaningful.

Of course, this isn't a list of stocks to buy -- or short! These stocks could have serious problems that warrant their short interest, but they might also be stricken by short-term troubles. Only Foolish due diligence will tell you for certain; our 170,000-strong CAPS community offers just such a good place to start.

The short list
The National Enquirer apparently now receives the same sort of unquestioning gravitas that is typically reserved for the Wall Street Journal or New York Times, at least when it comes to reporting the health of Apple founder Steve Jobs. Or, everyone just likes eyeball-grabbing headlines.

The tabloid, which has been known to break a real story or two, says Jobs has just six weeks to live and reportedly has pictures showing an exceptionally gaunt Jobs leaving the Stanford Cancer Center. If it is Jobs, he does look terribly ill, but the photos released thus far are pretty ambiguous as to the identity of the person in them.

Ever since Jobs took his third leave from Apple last month, questions about whether the company can continue to advance and develop iconic products like it did under his stewardship have been the subject of Internet chatter, but the biggest criticism may be the lack of a succession plan. Even Warren Buffett has implemented a plan at Berkshire Hathaway (NYSE: BRK-B) to ensure a smooth transition, though I remain unconvinced that anyone stepping into his shoes can pull off anything remotely close to his investing record.

CAPS member BlazerMania says Jobs' health will continue to be something Apple has to contend with, as will competition from Google (Nasdaq: GOOG): "Too much uncertainty with Android and Jobs' health for the stock to move much over the next couple quarters."

Let us know in the comments section below or on the Apple CAPS page whether the obsession with Steve Jobs is a valid concern for investors.

A blackout in value
Oops. The shorts couldn't have timed it more wrong when it comes to Clinical Data. Its shares are soaring on rumors that Pfizer (NYSE: PFE) or Merck (NYSE: MRK) might want to buy it. The biotech pulled out of an investor conference leaving investors to speculate on whether there was big news in the air. Of course, it could have been that shorts were just covering their positions too, creating a self-fulfilling cycle that drove the stock higher.

Ever since the FDA approved Clinical Data's antidepressant Viibryd, skeptics have wondered whether it will be able to effectively compete against Cymbalta and Lexapro, let alone Zoloft and Prozac. Even if the market is large for such drugs, the field of possible candidates for prescription doesn't make it an easy road for Viibryd to travel.

Whether it can or not, CAPS member fencejake says the rumor-mongerers (or finger-crossers) are wrong about a buyout occurring anytime soon.

Sell side firm Piper Jaffray has confirmed that rumors surrounding CLDA's withdrawal from the BIO CEO conference are not true. While the company is no longer providing a formal presentation, Piper says "The company's Chief Medical Officer, Dr. Carol Reed, is still scheduled to speak as part of a panel on Major Depressive Disorder at 3pm." If a takeout were imminent there would be zero company representation at the conference.

If it was a short squeeze that sent Clinical Data's shares higher, then it's going to have to overcome its previous cash burning ways. Head over to the Clincal Data CAPS page and tell us if you think there's anything to be depressed about that, and then add the stock to your watchlist to gather all the news about its progress in one place.

Squeezed to death
Maybe it's the 59% rise in National Instruments' stock price over the past six months that has short sellers betting against the stock prior to its next earnings report. Yet just because a stock has gone up a lot doesn't mean it can't go up more, particularly when it's performing well. As an overall measure of the company's health, NI enjoyed a 22% sequential jump in orders over $20,000, and such orders were 40% higher than a year ago. With the purchase managers manufacturing index well over 60% in January, the economy has proven it is continuing to expand and that bodes well for National Instruments.

As CAPS member mwlove notes, the company is extremely well run, and should continue to enjoy success.

Simply a wonderfully run company producing quality products in a market where large margins are considered the norm. NATI is entering a period of steady growth and great returns.

Add National Instruments to the Fool's free portfolio tracker to stay on top of how this manufacturing sector bellwether is performing.

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!