7 Cash-Rich Stocks With Increasing Short Interest

by: Kapitall

If you are looking for value stocks that are set to rally, this list might offer an interesting starting point.

All of the stocks mentioned below have short floats above 5%. Additionally, these names recently experienced a significant increase of their short interest from the end of February to March 31.

On the positive side of things, these companies are trading at very attractive levels when comparing their free cash flow vs. their current market cap. This is reflected by their Price to Free Cash Flow ratio below 5, which represents that these names are generating more than 20% of their market cap from free cash flow.

Given this information, which of these stocks are you most bullish on?

1. Sonic Automotive Inc. (NYSE:SAH): Auto Dealerships Industry. Market cap of $687.33M. P/FCF at 4.05. Float short at 27.24%. Shorted shares increased by 158.52%, from 6.63M to 10.51M shares. This change represents 10.06% of the floating shares. After a solid performance over the last year, SAH has pulled back during recent sessions. The stock is -3.22% below its SMA20 and -5.87% below its SMA50, but remains 12.57% above its SMA200. The stock has gained 10.34% over the last year.

2. ReneSola Ltd. (NYSE:SOL): Semiconductor Industry. Market cap of $799.89M. P/FCF at 3.01. Float short at 19.36%. Shorted shares increased by 114.02%, from 7.92M to 9.03M shares. This change represents 2.38% of the floating shares. The stock is currently stuck in a downtrend, trading -7.03% below its SMA20, -11.96% below its SMA50, and -9.95% below its SMA200. It's been a rough couple of days for the stock, losing 5.92% over the last week.

3. AOL, Inc. (NYSE:AOL): Internet Information Providers Industry. Market cap of $2.11B. P/FCF at 4.26. Float short at 13.29%. Shorted shares increased by 121.44%, from 10.17M to 12.35M shares. This change represents 2.06% of the floating shares. The stock has lost 26.98% over the last year.

4. Meadowbrook Insurance Group Inc. (NYSE:MIG): Property & Casualty Insurance Industry. Market cap of $544.75M. P/FCF at 3.33. Float short at 5.89%. Shorted shares increased by 149.48%, from 1.94M to 2.90M shares. This change represents 1.95% of the floating shares. Might be undervalued at current levels, with a PEG ratio at 0.93, and P/FCF ratio at 3.33. The stock has gained 27.24% over the last year.

5. Pinnacle Financial Partners Inc. (NASDAQ:PNFP): Regional Bank. Market cap of $546.72M. P/FCF at 4.74. Float short at 11.29%. Shorted shares increased by 113.25%, from 3.17M to 3.59M shares. This change represents 1.32% of the floating shares. The stock has lost 10.37% over the last year.

6. H&R Block, Inc. (NYSE:HRB): Personal Services Industry. Market cap of $5.39B. P/FCF at 3.69. Float short at 11.22%. Shorted shares increased by 112.67%, from 29.04M to 32.72M shares. This change represents 1.26% of the floating shares. The stock has had a good month, gaining 11.14%.

7. Hertz Global Holdings, Inc. (NYSE:HTZ): Rental & Leasing Services Industry. Market cap of $6.99B. P/FCF at 3.45. Float short at 8.77%. Shorted shares increased by 113.83%, from 31.39M to 35.73M shares. This change represents 1.07% of the floating shares. The stock has had a couple of great days, gaining 5.18% over the last week.

*Short interest sourced from Aol Money, all other data sourced from Finviz.

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