10 Shorted Stocks With Strong Corporate Governance

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 |  Includes: AMKR, BKE, DIOD, EAT, LEN, MMR, NDN, NEU, SAM, WHR
by: Kapitall

Companies are valued at more than just their buildings and inventories – management teams also go into company valuations, and how well a company is run has big implications to its stock performance. One way to evaluate this is by looking at the corporate governance policies of the company, such as its board composition and shareholder rights.

Institutional Shareholder Services (NYSE:ISS) gives ratings for four areas of corporate governance, on risks related to: the board, the audit committee, the compensation committee, and shareholder rights. We ran a screen on highly shorted stocks for those that received “low risk” ratings on all four corporate governance categories from ISS.

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.)

Do you think these stocks deserve to be highly shorted? Use this list as a starting point for your own analysis.

List sorted by float short.

1. Buckle Inc. (NYSE:BKE) operates as a retailer of casual apparel, footwear, and accessories for young men and women in the continental United States. Market cap of $1.89B. Float short at 20.87%. According to ISS, the company has "low concern" in all corporate governance categories. The stock has performed poorly over the last month, losing 10.32%.

2. Boston Beer Co. Inc. (NYSE:SAM) produces and sells alcohol beverages primarily in the United States, Canada, Europe, Israel, the Caribbean, the Pacific Rim, and Mexico. Market cap of $1.27B. Float short at 19.01%. According to ISS, the company has "low concern" in all corporate governance categories. The stock has had a good month, gaining 12.92%.

3. Lennar Corp. (NYSE:LEN) operates as a home builder and provider of financial services in the United States. Market cap of $3.44B. Float short at 18.65%. According to ISS, the company has "low concern" in all corporate governance categories. The stock has had a couple of great days, gaining 7.72% over the last week.

4. Amkor Technology, Inc. (NASDAQ:AMKR) provides outsourced semiconductor packaging and test services in the United States and internationally. Market cap of $804.31M. Float short at 17.11%. According to ISS, the company has "low concern" in all corporate governance categories. This is a risky stock that is significantly more volatile than the overall market (beta = 2.23). The stock has lost 36.84% over the last year.

5. McMoRan Exploration Co. (NYSE:MMR) engages in the exploration, development, and production of oil and natural gas offshore in the Gulf of Mexico and onshore in the Gulf Coast area of the United States. Market cap of $2.58B. Float short at 16.92%. According to ISS, the company has "low concern" in all corporate governance categories. The stock has had a couple of great days, gaining 9.38% over the last week.

6. Brinker International Inc. (NYSE:EAT) develops, operates, and franchises various restaurant brands primarily in the United States. Market cap of $1.94B. Float short at 12.83%. According to ISS, the company has "low concern" in all corporate governance categories. The stock has had a couple of great days, gaining 6.55% over the last week.

7. 99 (NYSE:NDN) engages in the retail sale of consumable general merchandise with focus on name-brand products. Market cap of $1.54B. Float short at 12.37%. According to ISS, the company has "low concern" in all corporate governance categories. The stock has gained 37.42% over the last year.

8. Diodes Incorporated (NASDAQ:DIOD) makes and distributes standard semiconductor products to manufacturers in the consumer electronic, computer, communications, industrial, and automotive markets. Market cap of $935.21M. Float short at 12.05%. According to ISS, the company has "low concern" in all corporate governance categories. The stock has lost 18.13% over the last year.

9. NewMarket Corp. (NYSE:NEU) engages in the petroleum additives and real estate development businesses. Market cap of $2.65B. Float short at 10.93%. According to ISS, the company has "low concern" in all corporate governance categories. The stock has had a couple of great days, gaining 10.13% over the last week.

10. Whirlpool Corp. (NYSE:WHR) engages in the manufacture and marketing of home appliances worldwide. Market cap of $3.75B. Float short at 10.17%. According to ISS, the company has "low concern" in all corporate governance categories. The stock has lost 32% over the last year.

ISS ratings sourced from Yahoo! Finance; 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.