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Short selling is a helpful indicator for the market’s sentiment about a stock. When shorting increases, investors are generally more bearish about the stock, and when it decreases, investors are generally more bullish. We screened a universe of large-cap stocks with impressive profitability, beating their industry peers on gross, operating, and pretax margins. We screened this universe for those with significant decreases in shares shorted month-over-month, exhibiting a bullish change in sentiment.

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.

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

List sorted by decrease in shares shorted as a percent of share float.

1. Netflix, Inc. (NASDAQ:NFLX): Music & Video Stores Industry. Market cap of $15.26B. Shares shorted have decreased from 11.26M to 10.41M, a change representing 1.66% of the company's 51.08M share float. TTM gross margin at 53.92% vs. industry gross margin at 38.06%. TTM operating margin at 13.53% vs. industry operating margin at 9.61%. TTM pretax margin at 13.05% vs. industry pretax margin at 8.70%. The stock has had a couple of great days, gaining 8.49% over the last week.

2. Altera Corp. (NASDAQ:ALTR): Semiconductor Industry. Market cap of $14.87B. Shares shorted have decreased from 15.68M to 13.43M, a change representing 0.70% of the company's 321.23M share float. TTM gross margin at 72.66% vs. industry gross margin at 59.21%. TTM operating margin at 45.34% vs. industry operating margin at 25.50%. TTM pretax margin at 45.64% vs. industry pretax margin at 24.92%. The stock has gained 67.21% over the last year.

3. Discover Financial Services (NYSE:DFS): Credit Services Industry. Market cap of $14.57B. Shares shorted have decreased from 6.45M to 3.07M, a change representing 0.63% of the company's 540.51M share float. TTM gross margin at 38.70% vs. industry gross margin at 31.23%. TTM operating margin at 37.65% vs. industry operating margin at 27.44%. TTM pretax margin at 32.14% vs. industry pretax margin at 23.07%. The stock has had a good month, gaining 17.26%.

4. Rockwell Automation Inc. (NYSE:ROK): Industrial Electrical Equipment Industry. Market cap of $12.35B. Shares shorted have decreased from 4.79M to 4.08M, a change representing 0.50% of the company's 143.41M share float. TTM gross margin at 41.82% vs. industry gross margin at 35.98%. TTM operating margin at 13.87% vs. industry operating margin at 10.99%. TTM pretax margin at 12.90% vs. industry pretax margin at 7.85%. The stock has gained 69.97% over the last year.

5. AutoZone Inc. (NYSE:AZO): Auto Parts Stores Industry. Market cap of $12.28B. Shares shorted have decreased from 1.64M to 1.50M, a change representing 0.48% of the company's 28.94M share float. TTM gross margin at 53.29% vs. industry gross margin at 38.24%. TTM operating margin at 18.33% vs. industry operating margin at 9.75%. TTM pretax margin at 16.22% vs. industry pretax margin at 9.19%. The stock has gained 45.79% over the last year.

6. Praxair Inc. (NYSE:PX): Synthetics Industry. Market cap of $32.87B. Shares shorted have decreased from 5.70M to 4.69M, a change representing 0.33% of the company's 303.05M share float. TTM gross margin at 43.13% vs. industry gross margin at 36.39%. TTM operating margin at 21.63% vs. industry operating margin at 15.79%. TTM pretax margin at 20.34% vs. industry pretax margin at 15.03%. The stock has gained 35.64% over the last year.

7. The McGraw-Hill Companies, Inc. (MHP): Publishing Industry. Market cap of $12.74B. Shares shorted have decreased from 7.77M to 6.89M, a change representing 0.30% of the company's 292.46M share float. TTM gross margin at 62.05% vs. industry gross margin at 43.43%. TTM operating margin at 23.33% vs. industry operating margin at 17.04%. TTM pretax margin at 21.83% vs. industry pretax margin at 13.13%. The stock has gained 44.29% over the last year.

8. LAN Airlines S.A. (NYSE:LFL): Regional Airlines Industry. Market cap of $10.09B. Shares shorted have decreased from 5.18M to 4.62M, a change representing 0.29% of the company's 194.24M share float. TTM gross margin at 39.01% vs. industry gross margin at 23.96%. TTM operating margin at 13.05% vs. industry operating margin at 9.0%. TTM pretax margin at 10.58% vs. industry pretax margin at 6.29%. The stock has gained 51.71% over the last year.

9. Aetna Inc. (NYSE:AET): Health Care Plans Industry. Market cap of $16.32B. Shares shorted have decreased from 5.77M to 4.85M, a change representing 0.24% of the company's 378.66M share float. TTM gross margin at 28.41% vs. industry gross margin at 20.98%. TTM operating margin at 8.90% vs. industry operating margin at 8.53%. TTM pretax margin at 8.06% vs. industry pretax margin at 6.79%. The stock has gained 58.94% over the last year.

10. Grupo Televisa SA (NYSE:TV): Broadcasting Industry. Market cap of $12.72B. Shares shorted have decreased from 4.41M to 3.39M, a change representing 0.23% of the company's 436.12M share float. TTM gross margin at 52.84% vs. industry gross margin at 43.43%. TTM operating margin at 26.43% vs. industry operating margin at 17.04%. TTM pretax margin at 19.54% vs. industry pretax margin at 13.13%. It's been a rough couple of days for the stock, losing 7.41% over the last week.

11. Hershey Co. (NYSE:HSY): Confectioners Industry. Market cap of $12.86B. Shares shorted have decreased from 4.42M to 3.92M, a change representing 0.22% of the company's 225.11M share float. TTM gross margin at 46.31% vs. industry gross margin at 34.28%. TTM operating margin at 17.79% vs. industry operating margin at 12.51%. TTM pretax margin at 14.27% vs. industry pretax margin at 9.93%. The stock has gained 15.5% over the last year.

12. General Mills, Inc. (NYSE:GIS): Processed & Packaged Goods Industry. Market cap of $23.53B. Shares shorted have decreased from 7.37M to 6.05M, a change representing 0.21% of the company's 642.93M share float. TTM gross margin at 43.19% vs. industry gross margin at 34.28%. TTM operating margin at 18.56% vs. industry operating margin at 12.51%. TTM pretax margin at 16.97% vs. industry pretax margin at 9.93%. The stock has gained 4.98% over the last year.

Profitability data sourced from Fidelity, short data sourced from Yahoo Finance; all other data sourced from Finviz.

Source: 12 Highly Profitable Large Caps With Bullish Short Trends