Mid-January Short Interest Report Shows 8 Stocks with Good Fundamentals and High Short Interest
The most recent mania to hit the market seems to be stocks with high short interest. The huge spikes in Gamestop (GME) and AMC Entertainment (AMC) brought attention to an indicator that I’ve been using for 20 years. The most recent short interest reports recently came out and they are updated through January 15.
Some investors have been buying stocks simply because of their short interest level, but I am of the opinion that some stocks have such poor fundamentals that they should have high short interest levels. The stocks may rally over the short term, but in the end, the fundamentals are so bad that the company isn’t worth owning over the long term. These companies have seen earnings and revenue decline year after year and have poor profitability measurements.
Conversely, there are companies with high short interest levels that have strong fundamentals, have seen strong earnings and revenue growth, and have good profitability measurements. Companies that fit this description are much more appealing to me.
Once the new reports were published, I uploaded 37 stocks in to the Tickeron screener. These stocks were the ones with the highest percentage of short interest compared to the number of shares in the public float. From that list of 37 stocks, I isolated eight stocks that had an overall fundamental picture that I liked.
Of the eight stocks, the Tickeron scorecard has five with “strong buy” ratings, one with a “buy” rating, and two with “sell” ratings. The scorecard ratings are a combination of fundamental and technical analysis.
Several things jumped out at me about the eight stocks. First, all eight have received monthly bullish signals from Tickeron’s trend prediction tool over the last few days. Six of the eight signals have confidence levels over 80%. This suggests that these eight stocks have a high probability of moving higher over the next month.
The second thing that jumped out at me was the fact that six of the eight stocks have positive marks in one specific indicator that I rely on heavily—the SMR Rating. The only two stocks that don’t have a good SMR rating are Petmed Express (PETS) and National Beverage (FIZZ). Even those two companies have neutral readings in the category.
On the technical side, there are three areas where the majority of the stocks have received bullish signals of late. The three categories are the Aroon Indicator, the Momentum Indicator, and the Moving Average Indicator. All eight have received bullish signals from their Momentum Indicators in the last three weeks. Seven of the eight have received bullish signals from their Moving Average indicator without a single bearish signal. Seven of the eight have also received bullish signals from their Aroon Indicators with one bearish signal from National Beverage.
While I arrived at this list of stocks due to the short interest as a percentage of the float, there is another indicator that I like to look at as well and that is the short interest ratio. This indicator measures the number of shares sold short divided by the average daily trading volume. What this tells us is how long it will take short sellers to cover their positions based on the average daily volume.
My suggestion is to keep an eye on these stocks because if they start or continue to rally, the unwinding of the short positions can push the stock higher and higher.
IRBT in -4.52% downward trend, declining for three consecutive days on March 26, 2024
Moving lower for three straight days is viewed as a bearish sign. Keep an eye on this stock for future declines. Considering data from situations where IRBT declined for three days, in of 353 cases, the price declined further within the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Aroon Indicator for IRBT entered a downward trend on April 01, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where IRBT's RSI Indicator exited the oversold zone, of 47 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 65 cases where IRBT's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
Following a +1 3-day Advance, the price is estimated to grow further. Considering data from situations where IRBT advanced for three days, in of 281 cases, the price rose further within the following month. The odds of a continued upward trend are .
IRBT may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.206) is normal, around the industry mean (6.278). P/E Ratio (48.077) is within average values for comparable stocks, (27.521). IRBT's Projected Growth (PEG Ratio) (0.000) is slightly lower than the industry average of (1.278). IRBT has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.033). P/S Ratio (0.263) is also within normal values, averaging (0.986).
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating slightly worse than average price growth. IRBT’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. IRBT’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 76, placing this stock worse than average.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
a company, which engages in the business of designing and building robots
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