20 Stocks That Traders Are Shorting Like Crazy

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Photo: David July via Flickr

Even as the market heads higher on the back of unlimited quantitative easing, investors are betting a number of companies are going to see shares tumble.According to the most recent data available (end of August), more than 50 stocks trading on the NYSE have short interest above 25 per cent of float.

But that’s not always a good sign of where you should place your chips — we’ve already seen one big trade on this list backfire for investors.

Standard Pacific

Ticker: SPF

Description: Housing

Short Interest: 33.0 per cent

3 Month Return: +34.2 per cent

Comment: Shares in SPF have run up to a 52 week high as housing data continues to improve in the country -- and short interest has started to decline.

Source: Bloomberg, Dow Jones

Polypore International

Ticker: PPO

Description: Polymer membrane developer

Short interest: 33.6 per cent

3 Month Return: -8.9 per cent

Comment: Polypore's stock plummeted at the end of the summer after the company reported higher costs and declining revenues.

Source: Bloomberg, NASDAQ

AMREP

Ticker: AXR

Description: Land Development and Media Services

Short interest: 33.7 per cent

3 Month Return: +52.6 per cent

Comment: AMREP's loss widened in its fiscal first quarter, which it reported in September. The company blamed poor newspaper delivery orders (AMREP delivers papers and magazines for a number of major publications).

Source: Bloomberg, Company Filings

K12 Inc

Ticker: LRN

Description: Education

Short interest: 34.1 per cent

3 Month Return: -4.1 per cent

Comment: Short interest has surged more than 21 per cent over the summer as concerns of the for-profit firm's ability to gain share in public schools increased.

Source: Bloomberg, Seeking Alpha

Boston Brewing Co.

Ticker: SAM

Description: Beer

Short interest: 34.8 per cent

3 Month Return: -5.2 per cent

Comment: Second-quarter earnings slid 49 per cent from a prior-year glass recall settlement and increased spending on brand investments and saw barley costs rise.

Source: Bloomberg, Dow Jones

Fusion-io

Ticker: FIO

Description: Computer Hardware

Short interest: 35.6 per cent

3 Month Return: +46.2 per cent

Comment: Fusion-io was weighed down as a number of major computer manufacturers gave weak guidance for 2012 and 2013.

Source: Bloomberg, Washington Business Journal

Dole Food

Ticker: DOLE

Description: Food

Short interest: 36.9 per cent

3 Month Return: +54.7 per cent

Comment: The company's massive debt has worried investors, but the recent sale of two businesses for $1.7 billion has sent the stock higher.

Source: Bloomberg, The New York Times

Higher One Holdings

Ticker: ONE

Description: Education

Short interest: 38.2 per cent

3 Month Return: +20.2 per cent

Comment: Higher One has been signaled out for poor lending practices to students that included hidden fees.

Source: Bloomberg, Columbus Dispatch

GameStop

Ticker: GME

Description: Retail

Short interest: 38.6 per cent

3 Month Return: +24.1 per cent

Comment: A long-running member of this list, the company can't shake fears that it will be the next Circuit City. It was recently declared a takeover target.

Source: Bloomberg, Smart Money

Supervalu

Ticker: SVU

Description: Retail

Short interest: 40.1 per cent

3 Month Return: -47.2 per cent

Comment: The company's stock has collapsed since it announced it was suspending dividends and reviewing its entire strategy. Recently, Supervalu said it would lay off some employees as it restructures.

Source: Bloomberg, Businessweek

JCP

Ticker: JCP

Description: Retail

Short interest: 40.2 per cent

3 Month Return: +31.7 per cent

Comment: JC Penney has been dogged by a slow and capital intensive turnaround that has sent same-store sales lower.

Source: Bloomberg

Sealy

Ticker: ZZ

Description: Mattresses

Short interest: 40.7 per cent

3 Month Return: +12.7 per cent

Comment: Short interest in Sealy jumped following a big miss from rival Tempur Pedic and concerns over its debt burden.

Source: Bloomberg, Tempur Pedic Company Filing

Radioshack

Ticker: RSH

Description: Retail

Short interest: 41.7 per cent

3 Month Return: -34.4 per cent

Comment: Another teetering big box retailer, Radioshack recently suspended a share buyback program to pay down debt.

Source: Bloomberg, Reuters

Sturm Ruger

Ticker: RGR

Description: Firearms

Short interest: 42.7 per cent

3 Month Return: +34.6 per cent

Comment: The company has had difficulty keeping up with demand for its products and has had to halt orders already this year.

Source: Bloomberg, MarketWatch

American Greetings Corporation

Ticker: AM

Description: Card producer

Short interest: 44.1 per cent

3 Month Return: +2.7 per cent

Comment: Investors remain unconvinced after the company's $75 million share repurchase this summer.

Source: Bloomberg, Dow Jones

KB Home

Ticker: KBH

Description: Homebuilder

Short interest: 44.4

3 Month Return: +53.9 per cent

Comment: The company remains hamstrung by debt concerns even as confidence grows that the housing bottom has come and gone.

Source: Bloomberg, Dow Jones

Pandora

Ticker: P

Description: Internet music

Short interest: 46.6 per cent

3 Month Return: -9.3 per cent

Comment: The breakout online music streamer is now facing stiff competition from Samsung and Spotify, and it has had difficulty monetizing its mobile platform.

Source: Bloomberg, Wall Street Cheat Sheet

USANA Health Sciences

Ticker: USNA

Description: Nutritional supplements

Short interest: 47.7 per cent

3 Month Return: +22.1 per cent

Comment: The stock continues to move in lockstep with Herbalife, whose price has yet to recover from David Einhorn's negative call in May.

Source: Bloomberg, Google

Yelp

Ticker: YELP

Description: Internet Services

Short interest: 50.8 per cent

3 Month Return: +20.4 per cent

Comment: Short interest in Yelp heading into the company's lockup expiration, after investors expected big sales. But that wasn't the case, and shares shot higher.

Source: Bloomberg, Benzinga

hhgregg

Ticker: HGG

Description: Retail

Short interest: 54.8

3 Month Return: -20.2 per cent

Comment: Perhaps the longest denizen of this list. The company cut guidance for FY2013.

Source: Bloomberg, Company Filings

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