The 15 Stocks That Everyone Loves To Short

Verizon

UBS is out with its latest list of the 15 stocks that are shorted by the most clients.

The list includes some big blue chips, like J&J and Verizon, and includes some like Greenmountain Coffee that has perennially frustrated for short sellers.

Others like Boston Properties are new to the list.

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.

Johnson & Johnson

YTD return: +3.25%

Short per cent of float: 1.3%

J&J which makes up 4.71% of Warren Buffett's portfolio, but its share's shorted have climbed from earlier this year, as the company faces competition from Pfizer and Merck, and markets turned bearish on the healthcare sector.

More recently though, analysts have argued that the sell-off in healthcare stocks was premature and they expect a rebound.

Verizon Communications

YTD return: -3.55%

Short per cent of float: 1.5%

Verizon has reported a sharp decline in its traditional land line phone business, and for now the company's troubles have only got worse, with 45,000 Verizon employees on strike since August 8.

Linear Technology Corp.

YTD return: -20.61%

Short per cent of float: 5.8%

Linear technology which makes circuits for a range of industries has been uncertain about the impact of the Japanese tsunami and nuclear disaster on its business. The company voiced a cautious outlook because of declining orders.

Boston Properties

YTD return: +18.03%

Short per cent of float: 7.4%

Unlike many of its competitors, real estate investment trust (REIT) Boston Properties which focuses on high-demand markets like Manhattan, Washington D.C., Boston and San Francisco has done fared well. And its expected to have short-squeeze potential i.e. have stock price go up on increased demand, and a strong upward trend.

Frontier Communications

YTD return: -27.24%

Short per cent of float: 9.4%

Frontier's Q2 earnings fell on account of massive operating expenses and the company has faced flak from disgruntled employees.

Salesforce.com

YTD return: +3.69%

Short per cent of float: 9.6%

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.

Gannett Company Inc.

YTD return: -29.22%

Short per cent of float: 10.3%

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. Revenue growth continues to be a challenge for the company.

Express Scripts Inc.

YTD return: -11.63%

Short per cent of float: 10.5%

Investors are concerned that Express Scripts won't be able to finalise its $29.1 billion acquisition of Medco, and not just because of the difference in spread. There were also huge doubts about whether it would receive regulatory approval.

Safeway Inc.

YTD return: -19.39%

Short per cent of float: 10.6%

Safeway has been struggling with its rivals because it isn't as competitively priced as Wal-Mart, in terms of quality it loses to Whole Foods, and it faces competition from regional chains.

Best Buy

YTD return: -28.61%

Short per cent of float: 11.8%

Fitch downgraded Best Buy because they credited the company's recent rally to the $5 billion share buyback program and on weak same-store sales for two consecutive quarters. In a nutshell they believe the brand is losing market share.


Green Mountain Coffee

YTD return: +201.89%

Short per cent of float: 14.1%

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.

JC Penney Company Inc.

YTD return: -16.65%

Short per cent of float: 20.1%

JC Penny's brand is old and the company's growth has been sluggish. 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.

First Solar Inc.

YTD return: -19.9%

Short per cent of float: 40.2%

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 has seen massive insider selling at the company. He's also short solar stocks because he expects Eurozone austerity to hurt government subsidies for the solar sector.

BHP Billiton

YTD return: -11.87%

Short per cent of float: N/A

Strikes at BHP Billiton's Australian mines have disrupted output and been driving down shares. The company is also heavily dependent on China deriving 25% of its revenue from the country.

Ciena Corp.

YTD return: -38.34%

Short per cent of float: N/A

The bears have borne down on the stock because of its weak historical performance, return on equity, and poor debt management. The stock hit a one-year low last week.

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