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 Nasdaq exchange that reported some of the largest changes in short interest positions in 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)











Conexant (NASDAQ:CNXT)





Dendreon (NASDAQ:DNDN)





TD Ameritrade (NASDAQ:AMTD)





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, more than 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 like.

We see a number of returning stocks on the list, meaning that short sellers continue to build up against them. Comcast, Intel, and Dendreon have all appeared on prior short interest lists that we've chronicled. While the shorts may have been proven right on Dendreon, with its stock falling more than 64% earlier this month as its prostate cancer drug's approval was delayed by the FDA, the others have seemingly held their own.

New to the list, however, is discount broker TD Ameritrade, a highly rated stock over on CAPS. While the stock market has been pushing to new highs, this company has soared on the strength of institutional buying of shares. Individual investors have been sitting out for the most part, and that's hurt quarterly results at TD Ameritrade, ETrade (NASDAQ:ETFC), and Motley Fool Stock Advisor recommendation Charles Schwab (NASDAQ:SCHW).

Yet those same weak financial reports have fueled speculation that the sector may be ripe for consolidation, and Ameritrade's stock has risen by more than 28% since the beginning of April. Are the short sellers expecting no big deals to be announced?

More than 330 professional and novice investors have weighed in on the discount broker, with about 20% of those considered All-Stars -- CAPS players who have consistently outperformed their peers. Almost all of them are bullish on Ameritrade, and that sentiment has grown more pronounced as consolidation rumors have swirled. We can tell that by its CAPS trend. Here's what a few CAPS players had to say:

  • Fellow Fool TMFGebinr likens TD's operations to collecting the fare at a tollbooth. "Being a toll booth operator can be quite profitable, especially if all you do is let traffic flow through your hands and not have to worry about paying for the road. That's what this company does, except it handles equity trades for a fee. The inexpensive infrastructure of the Internet allows them to be quite profitable, especially as more people become comfortable handling financial transactions online. The integration with TD Waterhouse (the U.S. side of it) seems to be going smoothly. I like their customer service and wait times are not very long at all. The online interface is smooth, as well."
  • DargFool thinks consolidation can bring about a change in services. "Online brokerages are here to stay. Consolidation is still ongoing. Eventually, brokerages will have equivalent offerings of full-service financial companies with cheaper delivery through their technology base, and a nice installed base of users which might be interested in the additional services."

But not everyone is sold on the potential. CAPS Bear AKValueInvestor brings up the good point that switching costs are minimal. "They do not have a moat, switching brokers is easy. They have a lot of research tools but I don't think the research tools are much of a differentator [sic]. Electronic brokerage is strictly a commodity business."

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 owns shares of Intel, but does not have a financial interest in any of the other stocks mentioned. He does have a TD Ameritrade brokerage account. You can see his holdings here. Intel is a recommendation of Motley Fool Inside Value. The Motley Fool has a disclosure policy.