Bank of America and Citi just had their ratings cut by Moody’s, and they’ve appeared on UBS’ list of 15 most shorted stocks as well.Other major blue chips like Johnson & Johnson feature on the list, as do stocks like Green Mountain Coffee that have frustrated short-sellers.
Note: Stocks identified are from a UBS report, based on its highest concentration of clients. Data on YTD returns and short per cent of float are from Yahoo Finance.
Short per cent of float: 1.8%
YTD return: +2.07%
Goldman Sachs recently downgraded J&J from to 'neutral' from 'buy' because of weakness in its medical devices and diagnostics segment. Its Xarelto treatment is also unlikely to be as successful as originally thought.
Short per cent of float: 2.1%
YTD return: -52.17%
Moody's downgraded Bank of America's long-term rating to Baa1 saying that the U.S. government would be less likely to bail it out. It has been unprofitable in three of the last four quarters, with about $30 billion in charges to bad mortgages. BoFA is laying off at least 30,000 of its employees.
Short per cent of float: 2.2%
YTD return: -46.05%
Citigroup's balance sheet woes and mortgage foreclosure practices, have been a cause of concern for investors. Now, Moody's has cut Citi's short-term rating arguing the U.S. government would be less likely to bail it out, if it got into financial trouble.
Meanwhile, an explosive new book has said President Obama had asked treasury secretary Tim Geithner to wind down Citi's operations, an order he ignored.
Short per cent of float: 7.3%
YTD return: -42.27%
Jonathan Hoeing a managing member of Capitalist Pig hedge fund is short on General Motors because of drags on the stock. In Smart Money, he argues for his position because the company's car sales haven't been stellar, taxpayers continue to be largest shareholders and the company is subject to political influence, according to.
Short per cent of float: 9%
YTD return: -4.04%
Value investor Whitney Tilson has been short on Salesforce.com on account of insider selling. The company reportedly has the second highest level of insider selling in corporate America. The company 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: 10.8%
YTD return: -29.66%
Best Buy is losing revenue in its overseas market and it has been speculated that the company could pull out of the UK. Fitch downgraded Best Buy because they thought the recent rally in its stock was because of a $5 billion share buyback program and because its had weak same-store sales. They believe the brand is losing market share.
Short per cent of float: 14.4%
YTD return: +234.78%
Greenmountain has attracted controversy because of its huge growth, sky-high valuations and allegations of tricky accounting. It also faces increased competition in the single-serve coffee front. Short-sellers however been frustrated because the stock seems to keep climbing.
Short per cent of float: 20.8%
YTD return: +5.1%
Garmin Ltd. develops consumer, aviation and marine technologies, including GPS devices. Garmin's stock has taken a hit on account of weak demand in consumer electronics market, especially the portable navigation device market.
Short per cent of float: 22.1%
YTD return: -18.63%
JC Penny's brand is old and the company's growth has been sluggish.Perhaps in a move to refresh its image it released controversial t-shirt which only got it more bad press. Shares jumped when the company recruited Ron Johnson as its new CEO but progress is expected to be slow.
The short interest has increased to 23.01 million shares and the company said sales were hurt because of Hurricane Irene.
Short per cent of float: 35%
YTD return: -42.8%
The bears have borne down on the stock because of its weak historical performance and poor debt management. Naysayers expect its technical problems to continue, but the company has managed to narrow its losses, and Soros Fund Management disclosed a 4.99% passive stake in the company as of August 31.
Short per cent of float: N/A
YTD return: -26.86%
Netflix CEO Reed Hastings is known to take long views instead of opting for the easier short-term one. His decision to split the streaming and dvd-for-rent (Qwikster) operations has really hurt the stock. The company announced that it expects to lose customers.
Short per cent of float: N/A
YTD return: -40.69%
Media company Gannett's shares have been volatile and the company has been laying off staff across the country in a bid to cut costs. The company's net income is getting worse and its EPS is weak. At a difficult time, CEO Craig Durow is taking his second medical leave of absence in as many years.
Short per cent of float: 35.4%
YTD return: -43.51%
Jim Chanos thinks solar stocks are a bunch of 'hot air'. He expects First Solar to have negative cash flow in a year. Key executives have left the company, and there has been massive insider selling. He's also short solar stocks because he expects Eurozone austerity to hurt government subsidies for the solar sector.
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