Here’s Why Investors Are Short These Popular Stocks
With stocks surging day in and day out, short-sellers are licking their chops, at a chance to bet on the downside.
UBS (NYSE:UBS) recently circulated a note regarding which stocks their clients are most heavily shorting.
FIRST SOLAR: Stock is frequently shorted due to sudden industry shifts
Ticker: (NASDAQ: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
Image: GenBug via Flickr
Ticker: (NASDAQ: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
Image: Associated Press
Ticker: (CRM) Shares short: 10.4%
The cloud computing applications firm had significant insider selling according to Insider Monkey.
BLACKBOARD: Weak earnings outlook
Ticker: (NASDAQ: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
Image: Hamed Saber via Flickr
Ticker: (NYSE: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: (NASDAQ: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
Rovi CEO Fred Amoroso
Ticker: (NASDAQ: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: (NYSE: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
Image: Business Insider photo illustration
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: (NYSE: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: (NYSE: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: (NYSE: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: (NASDAQ: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.
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