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 having some of the largest short interest positions in June. 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, June

Shares Short, May

% Change

CAPS Rating (out of 5)






Level 3 Communications (NASDAQ:LVLT)





Microsoft (NASDAQ:MSFT)





Sirius Satellite (NASDAQ:SIRI)










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 60,000 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.

Most of the names here are familiar to us from the last time we looked at the list, meaning that short sellers continue to dislike the prospects for these companies. While it looks like the short sellers have renewed their attack on Sirius, since the number of shares short once again jumped, it also appears they've turned their attention to Intel, which is new to the list this month and saw a 23% increase in the amount of stock being sold short.

The computer chip industry may once again be readying for a slowdown, and demand for certain types of memory -- called NOR -- may be slack. There's also concern that Advanced Micro Devices (NYSE:AMD) may increase the inroads in market share it made against the industry leader before Intel mounted a strong defense. In its just-released earnings report, it reported much higher revenue, but profit margins were lower than expected, as average selling prices for its chips were down. The company expects them to rebound later in the year, however.

More than 3,000 investors have weighed in on Intel, and one out of every five of those professional and novice investors are considered All-Stars: CAPS players who have consistently outperformed their peers. Almost all of them are bullish on the company, with that sentiment being consistently maintained since the beginning of the year. We can tell that by its CAPS trend. Here's what a few CAPS players had to say:

Agenda42 believes Intel has the product depth to keep it ahead of AMD.

Intel's product roadmap over the next two years is very strong. Both market share and profit margin should continue to increase as Intel rolls on.

The market currently expects Barcelona to be AMD's savior, but the technical details aren't bearing that out. AMD is having significant difficulty with both yields and clock speed. If Barcelona retakes the processor lead, Intel is still in very strong position. If Barcelona ends up being on par or only a marginal improvement, INTC will explode.

In short, I see only upside from the potential near-term catalysts.

Another CAPS player, chemadow, sees Microsoft's Vista operating system as a catalyst for future growth.

INTC is clearly undervalued both on an historical basis and on a fundamental basis. Sure AMD has delivered good products over the past few years. However, AMD's huge mistake was that of trying to eat a big slice of the cake so soon. And for that, they are going to pay dearly. They were simply stupid to challenge INTC in a price war and that is what led them to move to a foundry model instead of a full ownership model. The latter model will probably do better during economic downturns, but INTC's model will do much, much better during economic upturns. If you believe, like I do, that VISTA is likely to ignite a replacement cycle and that, despite continued woes about the housing sector, the US economy is going to do well in the coming two years, then you would believe that INTC will be trading north of $40 per share in two years' time.

Of course, not everyone is so upbeat. Intel bear msrs2k thinks only a return to monopoly pricing will help the chip maker grow, but that's not going to happen. "Returning to monopoly pricing ASPs would require a sustained technology advantage over AMD across CPU speed grades and markets (laptop/desktop/server).... unlikely in my opinion."

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!

Both Microsoft and Intel are recommendations of Motley Fool Inside Value. A 30-day free trial subscription is your shortcut to market-beating returns. Click here to start yours today.

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