Yesterday’s Short Squeeze Portfolio One Year Later highlighted seven stocks and two ETFs which had extremely high short interest back in early March 2009. Not surprisingly, these stocks have done very well as the market and the economy have turned around.
After having the bulls in chart for some 13 months, is a similarly constructed portfolio using current data a shopping list for bulls or for bears?
Looking at the list below (which includes companies with 30% of the float short, average volumes of at least one million shares per day, as well as additional filters for optionability, minimum market cap, price, etc.), which I assembled after yesterday's close, there is a strong representation of recent high fliers (TLB, SKS) in addition to several stocks that have been underperforming as of late (GDP, STEC, FSYS). Given my bias for shorting weakness rather than strength, I will be looking most closely at the latter group as possible short candidates, while keeping an eye on retailers such as Talbots and Saks as possible buy on the dip candidates until there is better evidence that the consumer – and retail stocks – are suffering from fatigue.
For more on related subjects, readers are encouraged to check out:
- Short Squeeze Portfolio One Year Later
- Short Covering Driving Today’s Gains
- Short Covering Rally Data Points
- Short Interest Screens