15 Stocks That Investors Are Shorting Like Crazy

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With the recent upswing in stocks short sellers are looking for any chance to bet against a company.

UBS recently published a note showing which stocks their clients are shorting the most.

The reasoning for each stock’s short interest ranges from blatant overvaluation to tough competition and government policies.

JOHNSON & JOHNSON: Competition, patent loss and slowdown in pharmaceutical market

Ticker: JNJ

Shares short: 0.80%

Though short interest in the stock has slightly decreased the company's outlook is still risky because it faces major competition from Pfizer and Merck.

This year products worth more than $30 billion will lose their patents.

Source: UBS

BANK OF AMERICA: Investors still weary of liability costs

Ticker: BAC

Shares short: 0.88%

Though its short share interest has decreased since last month, Bank of America was the hardest hit among large bank stocks because of concerns that it would have to pay billions in liability for foreclosure practices.

Source: UBS

AT&T: Lost its hold on Apple with Verizon's entrance

Ticker: T

Shares short: 0.93%

Some analysts consider the outlook for the stock to be too high considering it now has to share its crown jewel with Verizon.

AMAZON: Shares have dipped, new streaming service could hurt earnings

Ticker: AMZN

Shares short: 2.8%

Amazon shares have dipped 8% this year while competitors like eBay, Priceline.com and Netflix have seen share price increases.

UBS recently downgraded it because its new video streaming will impact margins. It said Wall Street's estimates for the company were too high for the second half of the year.

Source: UBS

GENERAL MOTORS: Profit fell short of expectations, position in China is under pressure

Ticker: GM

Shares shorted: 4.20%

Though it was a successful IPO GM cut a lot of employees and closed a dozen plants.

Increased competition from China and CEO Daniel Akerson said earnings would not meet expectations for the next three quarters.

Source: UBS

SALESFORCE.COM: Hypergrowth has slowed and increasing competition

Ticker: CRM

Shares short: 10.50%

The company posted strong earnings for the last quarter but some have argued that the stock price is way higher than it should be around $130 because Wall Street is so fascinated by cloud computing.

It also has Microsoft as a competitor which just signed on for several cloud computing deals.

Source: UBS

CHIPOTLE: Share pullback expected and food inflation impact

Ticker: CMG

Shares short: 11.8%

The stock was recently downgraded by a bunch of analysts over escalating food and labour costs.

The company has also recently had immigration problems.

Source: UBS

FASTENAL CO: Slow store sales growth, vulnerable to the economy

Ticker: FAST

Shares short: 13.6%

The outlook for the construction company is mixed though it posted strong earnings recently.

A stunted economy could slow its goal of reaching $125,000 in monthly average sales per store by 2012.

Source: UBS

LOGITECH INTL: Its computer products are becoming redundant plus flawed business model

Ticker: LOGI

Shares short: 20%

The computer gadgets maker is going the direction of Radio Shack according to Bronte Capital's John Hempton.

He said Logitech has also taken loans from its suppliers that are going to need to be repaid and has a bad business model.

Source: UBS

CREE: Earnings miss, lowered its revenue guidance for next quarter

Ticker: CREE

Shares short: 22%

The company missed on both the top and bottom line for its fourth-quarter earnings and cited an 'ongoing inventory correction' in Asia as a reason for the decline as well as lower-than-expected LED component sales.

Source: UBS

U.S. STEEL: Cheaper overseas competition and price increases

Ticker: X

Shares short: 24.50%

The company also posted a net loss of $482 million for the last quarter because it burned through its cash in the last 12 months.

Source: UBS

GREEN MOUNTAIN COFFEE: Rushed expansion and increasing coffee prices

Ticker: GMCR

Shares short: 24.50%

Last year the company bought up a bunch of its rivals at a very fast pace and it had over $335 million in debt by the end of the year.

The price of coffee is also on the upswing which is hard on the entire industry.

Source: UBS

FIRST SOLAR: Stock is shorted due to new government industry policies

Ticker: FSLR

Shares short: 28.8%

The solar industry is under threat from new government policies capping installations and it is predicting lower sales for 2011.

Source: UBS

NETFLIX: Transitioning business model, heavy competition, sky-high valuation

Ticker: NFLX

Shares Short: 36.3%

Its price to earning's ratio is too high to sustain. According to Yoni Jacobs 'Though the technicals visible in price levels still don't point to a NFLX correction, the candlestick patterns do.'

Several brokers have recently cut their ratings on the stock.

Source: UBS

BLACKBOARD: Poor growth prospects and steep competition

Ticker: BBBB

Shares short: 44.10%

The stock has lost 11.67% over the last year. It increased marketing and research and development to sustain revenue but this cut into margins.

It is expected to continue to lose customers.

Source: UBS

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