Stocks are up and the market is bullish. For some, that means it's time to sell, writes James Dennin on Kapitall.com.
Blackstone Group and Fortress Investment Group are both selling off everything that's not "nailed down" to their portfolios, according to Bloomberg. Both firms say they are "struggling" to find new deals at a time when prices are high and good deals are harder to come by.
Institutional investors are citing uncertainty about the future of the Federal Reserve, and when exactly the Treasury's relaxed lending rates will expire. This is making many funds more hesitant to acquire new assets, and instead they are using the bullish market to take advantage of higher prices by selling.
If the market is indeed at a high-point, then that explains why some funds are investing more in short positions than long ones. To follow the trend a little more in depth we decided to take a closer look at what kind of companies are being short sold. We ran a screen on stocks that are being shorted, and limited our screen to stocks with at least a 30% float short—that is, with at least 30% of their total number of shares being short-sold. We were left with nine stocks on our list.
Will pervasive selling drive prices down? Use the list below to begin your own analysis.
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1. Affymax, Inc. (AFFY): Engages in the development of drugs for the treatment of serious and life-threatening conditions. Market cap at $64.86M, most recent closing price at $1.73. Shares shorted have increased from 12.93M to 18.48M over the last month, an increase which represents about 14.85% of the company's float of 37.37M shares. Days to cover ratio at 3.37 days.
2. Bio-Reference Laboratories Inc. (BRLI): Provides clinical laboratory testing services for the detection, diagnosis, evaluation, monitoring, and treatment of diseases primarily in the greater New York metropolitan area. Market cap at $740.92M, most recent closing price at $26.75. Shares shorted have increased from 8.62M to 9.02M over the last month, an increase which represents about 1.64% of the company's float of 24.45M shares. Days to cover ratio at 27.1 days.
3. AM Castle & Co. (CAS): A specialty metals and plastics distribution company. Market cap at $393.62M, most recent closing price at $17.02. Shares shorted have increased from 3.82M to 4.59M over the last month, an increase which represents about 8.36% of the company's float of 9.21M shares. Days to cover ratio at 22.25 days.
NEXT PAGE: 6 More Stocks on the “Short” List
|pagebreak|4. Cliffs Natural Resources Inc. (CLF): Produces iron ore pellets, lump and fines iron ore, and metallurgical coal products. Market cap at $2.99B, most recent closing price at $19.51. Shares shorted have increased from 48.47M to 54.80M over the last month, an increase which represents about 4.16% of the company's float of 152.10M shares. Days to cover ratio at 5.62 days.
5. Molycorp, Inc. (MCP): Focuses on the production and sale of rare earth oxides from stockpiled feedstocks in the western hemisphere. Market cap at $1.14B, most recent closing price at $7.46. Shares shorted have increased from 46.67M to 48.72M over the last month, an increase which represents about 1.53% of the company's float of 134.23M shares. Days to cover ratio at 5.6 days.
6. JA Solar Holdings Co., Ltd. (JASO): Engages in the design, development, manufacture, and sale of photovoltaic solar cells and solar products, which convert sunlight into electricity in the People's Republic of China. Market cap at $360.31M, most recent closing price at $9.32. Shares shorted have increased from 3.37M to 3.87M over the last month, an increase which represents about 1.88% of the company's float of 26.63M shares. Days to cover ratio at 1.48 days.
7. SodaStream International Ltd. (SODA): Engages in the development, manufacture, and marketing of home beverage carbonation systems and related products. Market cap at $1.35B, most recent closing price at $65.08. Shares shorted have increased from 6.13M to 6.39M over the last month, an increase which represents about 1.43% of the company's float of 18.19M shares. Days to cover ratio at 4.63 days.
8. Vera Bradley, Inc. (VRA): Engages in the design, production, marketing, and retail of functional accessories for women under the Vera Bradley brand. Market cap at $983.66M, most recent closing price at $24.24. Shares shorted have increased from 8.45M to 8.99M over the last month, an increase which represents about 2.5% of the company's float of 21.62M shares. Days to cover ratio at 17.94 days.
9. Western Refining Inc. (WNR):Operates as an independent crude oil refiner and marketer of refined products in Texas, Arizona, New Mexico, Utah, Colorado, and the Mid-Atlantic region. Market cap at $2.61B, most recent closing price at $30.13. Shares shorted have increased from 18.92M to 21.43M over the last month, an increase which represents about 4.67% of the company's float of 53.79M shares. Days to cover ratio at 11.5 days.
Analyst ratings sourced from Zacks Investment Research, all other data sourced from Finviz.
By James Dennin of Kapitall.com
