Short Ideas: Stocks Near Lows With Significant Expenses Relative to Cash

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Includes: AIQUF, AROC, ATNI, CEA, CPB, KEP, RSG, SMA, SVU, SYY
by: Kapitall

If you're looking for short ideas, the following list might offer a good starting point.

The following is a list of stocks that are trading 0-10% above their 52-week low. For each stock, we calculated the average quarterly operating expenses over the last four quarters, and compared it with current cash holdings for each firm.

We found that all the companies listed below have operating expenses that are more than 3x their cash reserves, translating into significant potential weakness if revenues decline moving forward. Full details below.

Operating expenses and cash data from Google Finance, all other data sourced 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 the ratio of average operating expenses relative to current cash holdings.

1. SUPERVALU Inc. (NYSE:SVU): Grocery Stores Industry. Market cap of $1.60B. Current cash holdings at $186M vs. average quarterly operating expenses over the last four quarters at $9,747M, i.e. the company's average quarterly operating expenses are 52.4 times greater than current cash holdings. The stock is a short squeeze candidate, with a short float at 23.2% (equivalent to 5.98 days of average volume). It's been a rough couple of days for the stock, losing 6.09% over the last week.

2. SYSCO Corp. (NYSE:SYY): Food Wholesale Industry. Market cap of $16.22B. Current cash holdings at $209.75M vs. average quarterly operating expenses over the last four quarters at $9,118M, i.e. the company's average quarterly operating expenses are 43.47 times greater than current cash holdings. The stock has gained 0.58% over the last year.

3. Airgas Inc. (ARG): Industrial Equipment Wholesale Industry. Market cap of $5.27B. Current cash holdings at $35.02M vs. average quarterly operating expenses over the last four quarters at $927M, i.e. the company's average quarterly operating expenses are 26.47 times greater than current cash holdings. The stock has lost 1.47% over the last year.

4. Republic Services, Inc. (NYSE:RSG): Waste Management Industry. Market cap of $11.40B. Current cash holdings at $88.3M vs. average quarterly operating expenses over the last four quarters at $1,682M, i.e. the company's average quarterly operating expenses are 19.05 times greater than current cash holdings. The stock has gained 6.15% over the last year.

5. Exterran Holdings, Inc. (EXH): Oil and Gas Equipment and Services Industry. Market cap of $1.38B. Current cash holdings at $44.62M vs. average quarterly operating expenses over the last four quarters at $672M, i.e. the company's average quarterly operating expenses are 15.05 times greater than current cash holdings. The stock is a short squeeze candidate, with a short float at 12.74% (equivalent to 13.97 days of average volume).

6. Korea Electric Power Corp. (NYSE:KEP): Electric Utilities Industry. Market cap of $15.23B. Current cash holdings at $1855925M vs. average quarterly operating expenses over the last four quarters at $16,809,608M, i.e. the company's average quarterly operating expenses are 9.06 times greater than current cash holdings. The stock is currently stuck in a downtrend, trading -5.4% below its SMA20, -7.57% below its SMA50, and -10.29% below its SMA200. The stock has lost 27.85% over the last year.

7. China Eastern Airlines Corp. Ltd. (NYSE:CEA): Major Airlines Industry. Market cap of $4.81B. Current cash holdings at $4460.77M vs. average quarterly operating expenses over the last four quarters at $25,664M, i.e. the company's average quarterly operating expenses are 5.75 times greater than current cash holdings. Note that this is a risky stock that is significantly more volatile than the overall market (beta = 2.22). The stock is currently stuck in a downtrend, trading -7.04% below its SMA20, -12.44% below its SMA50, and -21.16% below its SMA200. The stock has lost 1.25% over the last year.

8. Symmetry Medical, Inc. (NYSE:SMA):
Medical Appliances and Equipment Industry. Market cap of $320.97M. Current cash holdings at $15.07M vs. average quarterly operating expenses over the last four quarters at $83M, i.e. the company's average quarterly operating expenses are 5.53 times greater than current cash holdings. The stock has lost 0.11% over the last year.

9. Atlantic Tele-Network, Inc. (NASDAQ:ATNI): Telecom Services Industry. Market cap of $493.54M. Current cash holdings at $37.33M vs. average quarterly operating expenses over the last four quarters at $201M, i.e. the company's average quarterly operating expenses are 5.39 times greater than current cash holdings. The stock is a short squeeze candidate, with a short float at 6.58% (equivalent to 6.55 days of average volume). The stock has performed poorly over the last month, losing 18.49%.

10. Campbell Soup Co. (NYSE:CPB): Processed and Packaged Goods Industry. Market cap of $11.43B. Current cash holdings at $325M vs. average quarterly operating expenses over the last four quarters at $1,584M, i.e. the company's average quarterly operating expenses are 4.87 times greater than current cash holdings. The stock is a short squeeze candidate, with a short float at 10.45% (equivalent to 8.97 days of average volume). The stock has gained 2.57% over the last year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.