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This list may be any interesting starting point for short ideas. We performed a DuPont analysis on about 130 stocks with short floats above 10%, breaking the Return on Equity (ROE) equation into three parts:

ROE

= (Net Profit/Equity)

= (Net profit/Sales)*(Sales/Assets)*(Assets/Equity)

= (Profit margin)*(Asset turnover)*(Equity multiplier)

All of the stocks mentioned below have seen rising ROE values during the recent quarter. But we wanted to analyze the sources of these returns, and identify cases where rising ROE can be attributed to increased use of leverage (i.e. the equity multiplier).

Is this an excessive use of leverage? To provide perspective on investor sentiment, we'll also include data on short positions affecting these stocks. Full details below.

Accounting data from Google Finance, short float and performance data from Finviz.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.

The list has been sorted by short float. Note: All ratios compare the most recent quarter's values against last year's corresponding quarter.

1. Quality Systems Inc. (NASDAQ:QSII):

Healthcare Information Services Industry. Market cap of $2.33B.

ROE: Return on Equity increased from 7.58% to 8.27%.

DuPont Analysis: When analyzing the sources of return, Net Profit Margin increased from 17.54% to 19.08%. Sales/Assets decreased from 0.2795 to 0.2599, while Assets/Equity increased from 1.55 to 1.67 (comparing the 3 months ending 2009-12-31 vs. the 3 months ending 2010-12-31).

Other Sentiment Data: Short float at 29.21%, which implies a short ratio of 34.25 days. The stock has gained 53% over the last year.

2. ITT Educational Services Inc. (NYSE:ESI):

Education & Training Services Industry. Market cap of $2.09B.

ROE: Return on Equity increased from 59.80% to 76.13%.

DuPont Analysis: When analyzing the sources of return, Net Profit Margin decreased from 25.01% to 23.77%. Sales/Assets increased from 0.6071 to 0.6078, while Assets/Equity increased from 3.94 to 5.27 (comparing the 3 months ending 2009-12-31 vs. the 3 months ending 2010-12-31).

Other Sentiment Data: Short float at 23.66%, which implies a short ratio of 8.43 days. The stock has lost -29.8% over the last year.

3. Kellogg Company (NYSE:K):

Processed & Packaged Goods Industry. Market cap of $19.62B.

ROE: Return on Equity increased from 7.75% to 8.76%.

DuPont Analysis: When analyzing the sources of return, Net Profit Margin increased from 6.07% to 6.61%. Sales/Assets decreased from 0.2589 to 0.2414, while Assets/Equity increased from 4.93 to 5.49 (comparing the 13 weeks ending 2010-01-02 vs. the 13 weeks ending 2011-01-01).

Other Sentiment Data: Short float at 22.66%, which implies a short ratio of 3.03 days. The stock has gained 4.67% over the last year.

4. Cabela's Inc. (NYSE:CAB):

Sporting Goods Stores Industry. Market cap of $1.84B.

ROE: Return on Equity increased from 1.94% to 2.06%.

DuPont Analysis: When analyzing the sources of return, Net Profit Margin increased from 3.01% to 3.07%. Sales/Assets decreased from 0.2486 to 0.1314, while Assets/Equity increased from 2.60 to 5.10 (comparing the 13 weeks ending 2009-09-26 vs. the 13 weeks ending 2010-10-02).

Other Sentiment Data: Short float at 15.62%, which implies a short ratio of 15.18 days. The stock has gained 67.86% over the last year.

5. Intrepid Potash, Inc. (NYSE:IPI):

Agricultural Chemicals Industry. Market cap of $2.85B.

ROE: Return on Equity increased from 1.36% to 1.58%.

DuPont Analysis: When analyzing the sources of return, Net Profit Margin decreased from 14.33% to 12.75%. Sales/Assets increased from 0.0878 to 0.1128, while Assets/Equity increased from 1.08 to 1.10 (comparing the 3 months ending 2009-09-30 vs. the 3 months ending 2010-09-30).

Other Sentiment Data: Short float at 15.5%, which implies a short ratio of 10.02 days. The stock has gained 48.22% over the last year.

6. Trinity Industries Inc. (NYSE:TRN):

Railroads Industry. Market cap of $2.31B.

ROE: Return on Equity increased from 1.30% to 1.72%.

DuPont Analysis: When analyzing the sources of return, Net Profit Margin increased from 4.16% to 5.50%. Sales/Assets decreased from 0.1211 to 0.0952, while Assets/Equity increased from 2.59 to 3.29 (comparing the 3 months ending 2009-09-30 vs. the 3 months ending 2010-09-30).

Other Sentiment Data: Short float at 14.42%, which implies a short ratio of 15.94 days. The stock has gained 88.68% over the last year.

7. Columbia Sportswear Company (NASDAQ:COLM):

Apparel Clothing Industry. Market cap of $2.13B.

ROE: Return on Equity increased from 2.32% to 2.62%.

DuPont Analysis: When analyzing the sources of return, Net Profit Margin decreased from 6.44% to 5.73%. Sales/Assets increased from 0.2954 to 0.3532, while Assets/Equity increased from 1.22 to 1.29 (comparing the 3 months ending 2009-12-31 vs. the 3 months ending 2010-12-31).

Other Sentiment Data: Short float at 13.82%, which implies a short ratio of 10.83 days. The stock has gained 48.84% over the last year.

8. CR Bard Inc. (NYSE:BCR):

Medical Instruments & Supplies Industry. Market cap of $8.71B.

ROE: Return on Equity increased from 4.83% to 6.10%.

DuPont Analysis: When analyzing the sources of return, Net Profit Margin increased from 15.64% to 18.99%. Sales/Assets decreased from 0.2329 to 0.2270, while Assets/Equity increased from 1.33 to 1.42 (comparing the 3 months ending 2009-12-31 vs. the 3 months ending 2010-12-31).

Other Sentiment Data: Short float at 11.5%, which implies a short ratio of 17.49 days. The stock has gained 16.2% over the last year.

9. Swift Energy Co. (NYSE:SFY):

Independent Oil & Gas Industry. Market cap of $1.82B.

ROE: Return on Equity increased from 1.14% to 1.29%.

DuPont Analysis: When analyzing the sources of return, Net Profit Margin increased from 7.82% to 8.83%. Sales/Assets decreased from 0.0689 to 0.0683, while Assets/Equity increased from 2.11 to 2.13 (comparing the 3 months ending 2009-09-30 vs. the 3 months ending 2010-09-30).

Other Sentiment Data: Short float at 10.83%, which implies a short ratio of 6.95 days. The stock has gained 74.66% over the last year.

Source: Accounting Flags: 9 Highly Shorted Stocks With Increasing Leverage