5/27/2011

2 Potential Value Ideas Heavily Shorted

I will try to post comments and analysis on these interesting potential value plays tonight.

Short % of Float = 25.70%

52-Week Change3: -37.38%

MOVE;

Short % of Float = 4.40%

52-Week Change3: -9.30%

4 comments:

Anonymous said...

How is MOVE heavily shorted at 4.4% of float?!!!

ShadowStock said...

You are right.

I’m looking at the data based on the change in the shares reported short from 02/28/11 (3,971,034) to 05/13/11 (4,702,181). That was a 18.41% increase over that time period or 731,147additional shares sold short. This only impacted the % short to float by .62%.
My float source was in error used to calculate my % change impact to the short to float over that period.
Sorry but the additional short positions does raise the question has the stock unjustly moved down?

Thanks
John

Anonymous said...

you are reaching here... just b/c short position has increased doesn't raise the question the move down is unjust. o/w you can say this for every stock that saw short position increased.

ShadowStock said...

Thanks for the comments.

I agree that just because a stock is heavily shorted does not make it a candidate to go long or short. In past studies academic research did show heavily shorted stocks underperform the market. But what I was trying to do here was find stocks that are unloved. the theme of the blog…ignored, neglected, unloved, diseased, ugly, small..
My efforts for this post goes way beyond the concept of heavily shorted. Yes my data mine started with over 4,000 stocks and the published NASDAQ short data every two weeks for the prior 12 months.
But from there I was looking at items such as short count changes over different time periods and its relationship to the float, shares outstanding, market price, enterprise value, valuation, insider activity, share buybacks/ issuance, sales,margins,book value, and many other points of financial valuation.
After viewing and reviewing I try to present something interesting like AMED or MOVE that some investors may find value for their portfolio.

Nice article published today by Motley fool supporting the merits of AMED based on the valuation thoughts of NYU,Prof Damodaran. Good article

http://www.fool.com/investing/value/2011/05/31/top-10-values-in-health-care.aspx