25 Short Candidates

As part of a great conversation in the comments over at The Sovereign Speculator, I prepared a list of short-sale candidates meeting the following criteria:

Total assets > 50 * tangible book
EBITDA(ttm) / EV yield less than 5%
Debt > 3 * market cap
Interest coverage ratio MRQ < 1.5

Here is the list, ranked from lowest interest coverage ratio to highest:

HW
F
OWW
SBGI
GBX
MTLQQ.PK *this can’t be shorted
ETFC
CAL
AMR
CEA
AXL
LNG
MIC
MHGC
LCC
MVGR.PK
DAL
CVO
RAD
URI
GE
ABD
UAUA
BLC
MTW
MEG

Every major airline is on the list!

Comments

[Squeaky:]

OWW is always on the craplist but they have tripled in the past 3 weeks. Does anyone know if this is real or some type of manipulation or trickery?

Aug 06 08:07 PM

[Novice Trader:]

ETFC should not be on this list. Folks who try to short ETFC are going to get squeezed, big time.
I own this stock @ $1.24 and expect it to hit $3 by the end of September.

Aug 07 01:03 PM

[connorport:]

It wont hit $3 by the end of sept. It may hit 3 by early next years but once ETFC gets on the climb it will run back to nice levels. It has been one of the most battered equities so far that still has a great core business but strap the word bank to any stock and you will see volatility. $1.24 was a good buy but to get rich quick might be unrealistic.


On Aug 07 01:03 PM Novice Trader wrote:

> ETFC should not be on this list. Folks who try to short ETFC are
> going to get squeezed, big time.
> I own this stock @ $1.24 and expect it to hit $3 by the end of September.

Aug 07 03:29 PM

[satyr:]

The only two I follow on the list are GE and RAD. The former does not seem like a particularly good short candidate, but given that it trades in a somewhat predictable range, I suppose one can go either long or short on it and have a shot at making a few bucks. RAD probably has a lot more upside than downside. And when it goes up, it can move quickly. I think the potential to have your head handed to you on a platter is pretty good if you short it.

Aug 07 09:28 PM

[User 309781:]

mixture of broad market rally and short squeeze... the fundamentals haven't improved much


On Aug 06 08:07 PM Squeaky wrote:

> OWW is always on the craplist but they have tripled in the past 3
> weeks. Does anyone know if this is real or some type of manipulation
> or trickery?

Aug 09 02:11 PM

[David White:]

Airlines got a little more bad news today when Chevy announced its mpg figure of 230mpg for the Volt. Chevy called this figure conservative. With this kind of gas mileage, a few more people will elect to drive to "closer" airline destinations.

This should negatively effect other automakers as well. It goes a long way toward making Chevy a leader again.

Aug 11 09:06 AM

[David White:]

In the news today, the number of US airline departures declined. Airline stocks were down on the news. Swine flu hasn't even hit in force yet.
In reference to Swine Flu, only 45M swine flu vaccine doses will be ready for the US in October. They had expected 120M to be ready. This is bad news for the airlines.

Aug 18 01:44 AM

[zaquetball:]

Just curious...why can't MTLQQ.PK be shorted?

Aug 21 12:28 AM

[GARP:]

I've just encountered this set of comments so I will give you both a thumbs-up on ETFT because though it didn't yet turn out to be a good short candidate you were right about it not going through the roof. To Novice Trader an even bigger kudos because you are doing very well with it. Congrats!


On Aug 07 03:29 PM connorport wrote:

> It wont hit $3 by the end of sept. It may hit 3 by early next years
> but once ETFC gets on the climb it will run back to nice levels.
> It has been one of the most battered equities so far that still has
> a great core business but strap the word bank to any stock and you
> will see volatility. $1.24 was a good buy but to get rich quick might
> be unrealistic.

Oct 05 09:50 AM