SumZero, an online community of buy-side professionals, has released its ranking of the best short-sellers amongst the website’s 12,000 members.
Short-sellers are betting that a stock will decline. They profit from this view by borrowing shares (at a small cost) and selling them at a high price. The idea is that, once the share price falls, the investor can buy them back cheaper and pocket the difference.
Each month, SumZero publishes rankings, measuring the site’s top members based on the performance of their investment ideas. Basically, the rankings show the users with the highest risk-adjusted returns relative to the market — among users who submitted a minimum number of ideas.
These are the ten most consistent out-performers on the short-side and their best ideas:
- Ben Axler (Spruce Point Capital Management): The activist short-seller and forensic financial researcher runs a small fund in New York City. His top short pitch on SumZero was James River Coal Company, with a return of 99.92%. The company ended up filing for chapter 11 bankruptcy. His other top shorts include, United States Antimony Corporation, which fell 91.84%, and China Integrated Energy, which fell 88.47% and was delisted.
- John Zhuo (Pintail Capital): Dallas-based Zhuo’s best short was children’s educational company LeapFrog Entertainment, which fell 67%. Another top performer was personal finance site Bankrate, which fell 42.6%.
- Alex Shuaib (Sunley House Capital): Alex Shuaib is a Boston-based senior associate at Sunley House Capital (an Advent International company), which he joined in February 2016. His most successful short idea on SumZero was his bet against aviation parts company Triumph Group, which fell 48.06%. His other profitable short ideas include Checkpoint Systems and Power Solutions International.
- Terry Peng (Prospection Capital): Terry Peng is the managing member and general partner of Austin-based hedge fund Prospection Capital. Since joining SumZero in 2012 he’s pitched five short ideas, with the best performer being his short of Swingplane Ventures (SWVI), which produced a return of 99.9%.
- Burt Ross (Wagamon Advisors): He’s the principal of New York-based Wagamon Advisors. Since joining SumZero in July 2013, he’s pitched three shorts. His best short idea was coal producer Walter Energy which fell 99.52% and filed for bankruptcy.
- Victor Bonilla (Lawton Park Capital Management): Victor Bonilla is currently a partner at long/short equity hedge fund Lawton Park Capital Management, founded by Matt Hagerty. His best performer so far has been Nimble Storage which returned 70%. His other top shorts include Fusion-IO, down 44%, and InvenSense, which fell 34.89%.
- Samuel Wilson (Taos Global Investors): Samuel Wilson is the founder of San Francisco-based Taos Global Investors. The best of his five short ideas on SumZero was a bet against Angie’s List which fell 64.84%. He shorted Angie’s another time and it fell 43%. His other successful short was medical device company LDR Holding, which fell 40.47%.
- Taylor Mann (Pine Capital Partners): Taylor Mann, the founder of Dallas-based Pine Capital Partners, has pitched ten short ideas since joining the site in March 2015. His best short so far has been Apollo Education Group, which fell 68.5%. His other top shorts include small loan consumer finance company World Acceptance Corp, which fell 48.63%, and Navient Corp, which fell 38.43%.
- Jalal Faruki (Sunhail Capital): Jalal Faruki, the executive director of Sunhail Capital, has pitched five shorts since joining SumZero in January 2014. His best performing idea to date was his bet against chicken restaurant chain El Pollo Loco which fell 55.17%.
- Kyle Mowery (Grizzly Rock Capital): Kyle Mowery is the managing partner at Chicago-based Grizzly Rock Capital, which he founded in 2012. His best short pick on SumZero so far has been GoPro, which fell 50.15%. His other top short ideas include Sprouts Farmers Market and Crawford & Company.
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