15 Stocks That People Are Shorting Like Crazy


Photo: www.cr.nps.gov

With stocks surging day in and day out, short-sellers are licking their chops, at a chance to bet on the downside.UBS recently circulated a note regarding which stocks their clients are most heavily shorting.

There are various issues at play. In some cases the stocks are flat-out seen as being overvalued. In other cases, there are specific accounting issues that shorts are honing in on.

FIRST SOLAR: Stock is frequently shorted due to sudden industry shifts

Ticker: FSLR

Shares Short: 30.9%

Solar industry under threat from potential stoppage in government subsidies.

GREEN MOUNTAIN COFFEE: SEC probe in the fall worries investors

Ticker: GMCR

Shares Short: 26.2%

The coffee maker was probed by the SEC last September. That probe forced the company to restate its financial performance for fiscal years 2007 to 2009 and the first three quarters of fiscal 2010.

CIENA: Company has high and increasing inventories

Ticker: CIEN

Shares short: 33%

CIENA's inventory as a percentage of assets increased from 6.75% to 18.15%.

JOHNSON & JOHNSON: Low earnings and a weak forecast

Ticker: JNJ

Shares short: 1.0%

The healthcare product company had low fourth-quarter earnings after it was hammered by recalls that put many of its products back on the shelves.

SALESFORCE.COM: Reported insider selling on stock is contributing to short interest rise

Ticker: CRM

Shares short: 10.4%

The cloud computing applications firm had significant insider selling according to Insider Monkey.

BLACKBOARD: Weak earnings outlook

Ticker: BBBB

Shares short: 39.4%

The education software application company had an outlook for the first quarter of this year that fell short of analysts' estimates as it closed the $53 million takeover of Presidium, an administrative and student services provider.

The deal was said to contribute to revenue for 2011 but will not help profit.

GANNETT: Pull-back expected in shares due to publishing and circulation drop

Ticker: GCI

Shares short: 10.7%

The international media and marketing solutions company is showing some signs of struggle in the changing media environment. It has 41.7 million shares short and a short interest ratio of 3.9.

NETFLIX: Overvaluation, more competitors coming in and the transition to streaming has created margin pressure

Ticker: NFLX

Shares short: 32.7%

The DVD and streaming service is going to be paying $500 million to a $1 billion on content this year while still supporting its DVD mail model which could put pressure on margins.

ROVI CORP: Attempting to compete with Netflix, Amazon through new acquisitions

Ticker: ROVI

Shares short: 7.4%

The technology software company has stayed fairly anonymous in the past few years but has quietly assembled all the pieces to create a video service that will rival Amazon, Netflix and iTunes offerings.

SL GREEN: Weak fundamentals and balance sheets despite share growth

Ticker: SLG

Shares short: 8.4%

SL Green has tons of risk on its portfolio from real estate assets, including an increase in commercial real estate, that may not be rentable.

VERIZON: iPhone adoption may hurt margins

Ticker: VZ

Shares short: 1.9%

Margins likely to be hit by the subsidies Verizon pays to entice iPhone buyers to sign up for a long-term contract.

U.S. STEEL: Fourth-quarter losses and down season for the steel industry

Ticker: X

Shares short: 17.9%

Goldman Sachs just lowered estimates for U.S. Steel for Q1 2011, based on the belief higher steel prices would not be passed on in that period.

BANK OF AMERICA: Management troubles and weak earnings

Ticker: BAC

Shares short: 114.9 million

Bank of America continues to have problems linked with the housing market, that are holding the stock back.

STARWOOD HOTELS & RESORTS: Carrying $2.8 billion in long-term debts

Ticker: HOT

Shares short: 7.3%

The lodging company has more than $1 billion in debt due between 2012 and 2014.

CREE: Company recently reported weak sales

Ticker: CREE

Shares short: 21.2%

CREE has a bad Q4 2010, and has lowered its estimates for 2011. LED lights have been oversupplied to the Asian market.

Want to know what Whitney Tilson thinks are the best shorts?

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