Investors short stocks for many reasons, sometimes a company has poor fundamentals and is going nowhere. Other times, they may be looking for a short squeeze.UBS has refreshed its of 15 most shorted stocks based on the highest concentration of clients.
Blue chips like Johnson & Johnson and Citigroup make the list.
Note: Stocks listed are from a UBS report, based on its highest concentration of clients, as of November 3, 2011. Data on YTD returns and short per cent of float are from Yahoo Finance.
Update: An earlier version incorrectly stated the short float of Aetnahealth Inc. and the article has been updated to reflect the change.
Short per cent of float: 1.69%
YTD return: +4.87%
J&J makes up 5.35% of Warren Buffett's portfolio, but the company has been hit by competitive pricing and the dismal macro environment, moreover, many of its over-the-counter medicines have ben recalled. Moreover J&J's much talked about bid for Synthes Inc. is facing an expansive EU probe.
Short per cent of float: 1.7%
YTD return: +0.19%
Verizon has reported a sharp decline in its traditional land line phone business. Another thorn in its side? FairPoint Communications is blaming Verizon for its bankruptcy and is has filed a $2 billion fraudulent transfer lawsuit.
Short per cent of float: 7.3%
YTD return: -4.48%
Circuit maker Linear technology has been uncertain about the impact of the Japanese tsunami and nuclear disaster on its business. Its orders have been declining but the global economic slowdown has also hurt the overall analogue chip industry.
Short per cent of float: 8.8%
Used-car retailer CarMax had grown in the past 18 months because of a demand for used cars as consumers shopped for a deal. But the company is now losing ground to new car dealers.
Short per cent of float: 11%
YTD return: +1.61%
Salesforce.com has a weak balance sheet and it is an expensive stock. Value investor Whitney Tilson has been short on the company because of insider selling. It is also expected to lose market share as competition from Microsoft heats up.
But CEO Marc Beinoff is getting more aggressive with the company's strategy, pushing for more independent software vendor (ISV) partnerships.
Short per cent of float: 13.1%
YTD return: +59.82%
Despite its great returns this year investors worry about Chipotle because of competition it faces from other fast-food brands. The stock is considered to be over-hyped and new labour regulation and food prices could increase costs.
Short per cent of float: 14.4%
YTD return: -10.6%
Investors are concerned that Express Scripts won't be able to finalise its $29.1 billion acquisition of Medco and could face an earnings cut because of its spat with Walgreens over pharmacy reimbursements.
Short per cent of float: 16%
YTD return: +113.94%
Critics point to Green Mountain's sky-high valuations and allegations of tricky accounting practices. It also faces increased competition in the single-serve coffee front. Short-sellers have been frustrated by the stock in the past, but its possible it may have peaked since it has lost some momentum.
Short per cent of float: 18.01%
Netflix CEO reversed his decision to split the company's streaming and DVD-to-rent business, after the company began losing subscribers. Moreover it faces aggressive competition, most recently from Microsoft, which is planning to offer online pay television frmo Comcast on the Xbox.
Short per cent of float: 19.45%
YTD return: -3.84%
Lennar Corporation is taking a hit because of the challenges in the property market.
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