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Beating Back the Short Attack

By Rich Duprey - Updated Apr 5, 2017 at 7:53PM

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Are these stocks making short work of short-sellers?

Because 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 profits.

This week, we'll take a look at companies on the Nasdaq stock exchange with the largest percentage decrease in the number of 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.


Shares Short-Dec. 15

Shares Short-Nov. 28

% Change

%   Float

CAPS Rating (out of 5)

Nissan Motor (NASDAQ:NSANY)






Life Technologies (NASDAQ:LIFE)












Liberty Global (NASDAQ:LBTYK)






American Italian Pasta












Superior Bancorp






Quest Resource






Aspect Medical Systems






Lufkin Industries (NASDAQ:LUFK)






Sources: 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 warranted their short interest, but they might also be stricken by short-term troubles. Only Foolish due diligence will tell you for certain; our 125,000-strong CAPS community offers a good place to start.

The short list
It's not only the U.S. automakers that are suffering. Dried-up consumer demand is hurting Japanese carmakers, too. Nissan and Honda (NYSE:HMC) are both experiencing plummeting sales in North America, while Toyota (NYSE:TM) will be reporting its first loss ever. The worldwide recession has caused Nissan to cut its domestic production by about 225,000 cars.

CAPS member hilda333, however, thinks Nissan's history of producing quality cars will lead it to eventually outperform the market.

I have owned and driven their vehicles for over 35 years. They produce one of the most [dependable] lines of autos and have never seemed to receive the credit that Toyota gets.

Many industries related to the oil sector seem to be caught over a barrel these days because their shares are valued as if we'll enjoy low prices for a protracted period. Certainly after oil peaked near $150, finding it below $40 is a welcome relief. Yet that decline has hurt companies like Lufkin Industries, which designs and makes oil field equipment and power transmission products worldwide. The stock is trading near its 52-week lows. But CAPS All-Star therailsplitter thinks investors might want to buy here.

Oil is not going to stay low forever. Near 52-week low. Lots of cash, strong growth, no debt, etc... etc.. Just bought for my real portfolio.

ttboydxb agrees and thinks it's only a matter of time before the market returns to its senses and bids up the shares again.

Gettin on dis-a train before people realize there is still only a limited supply of oil, and that the price will be back up shortly!

Because it gets grants to help accelerate stem-cell research, Life Technologies may profit from what is hoped to be attention from President-elect Obama's administration. CAPS member nthought believes a new Congress will help, too.

A recent downturn hurt biotech, but LIFE proved their viability by staying strong. Plus a more liberal Congress will finally [lift] the pointless ban on stem cell research. That will only help LIFE. Life also provides lab equipment and other consumables which makes them less risky than competitors.

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!

On Jan. 12, 2009, Fool co-founder David Gardner, Jeff Fischer, and their Motley Fool Pro team will accept new subscribers to their real-money portfolio service. Motley Fool Pro is investing $1 million of the Fool’s own money in long and short positions in a range of securities, including common stocks, put and call options, and exchange-traded funds (ETFs). They also incorporate proprietary CAPS "community intelligence" data into their research. To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.

Nissan is a Motley Fool Global Gains pick. Try any of our Foolish newsletters today, free for 30 days.

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

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Stocks Mentioned

ARM Holdings plc Stock Quote
ARM Holdings plc
Liberty Global plc Stock Quote
Liberty Global plc
$22.25 (-1.83%) $0.41
Honda Motor Co., Ltd. Stock Quote
Honda Motor Co., Ltd.
$24.98 (-1.01%) $0.26
Toyota Motor Corporation Stock Quote
Toyota Motor Corporation
$152.77 (-2.20%) $-3.43

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