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Though many people were pessimistic about the economy and European debt crisis, the market was up nearly 4% during the past three months. However, there are still a number of stocks that suffered big losses during that period. Additionally, some of these stocks are targeted by short sellers. We recommend investors be cautious about such stocks as their poor performances are likely to continue in the future.

Below we compiled a list of such stocks. All companies have at least a $5 billion market cap and open short interest of at least 5%. Their performances in the past 13 weeks are in the lowest 20% in the market. The market data is sourced from Fidelity.

Company

Symbol

Short%

Performance

EQUITY RESIDENTIAL

EQR

5.12%

-9.79%

KIMCO REALTY CORP

KIM

5.19%

-10.90%

AUTONATION INC

AN

6.14%

-10.57%

PRICELINE.COM INC

PCLN

7.83%

-9.56%

FOREST LABS

FRX

6.78%

-12.50%

ALCOA INC

AA

5.05%

-21.72%

CLIFFS NATURAL RES

CLF

6.69%

-18.15%

ALPHA NATURAL RES

ANR

5.17%

-27.43%

VIRGIN MEDIA INC

VMED

12.32%

-12.55%

FRONTIER COMM

FTR

8.21%

-23.63%

RESEARCH IN MOTION

RIMM

8.52%

-45.03%

GREEN MOUNTAIN

GMCR

17.63%

-49.94%

Green Mountain Coffee Roasters Inc (GMCR) is the worst performing stock in our list. It also has the largest open short interest, which is 17.63%. During the past 13 weeks, the coffee maker’s stock lost 49.94%. GMCR has a market cap of $9.21B and a P/E ratio of 45.79. Hedge fund managers such as David Einhorn and Whitney Tilson revealed that they were shorting GMCR when it was trading around $100 per share. In fact David Einhorn’s presentation at an investment conference catalyzed GMCR’s decline.

Research In Motion Ltd (RIMM) also lost more than 40% during the past 13 weeks. It was down 45.03% during that period and has an open short interest of 8.52%. The company designs and manufactures wireless solutions for the mobile communications market in the world. It has a market cap of $8.79B and a P/E ratio of 3.06. Leon Cooperman’s Omega Advisors initiated a brand new $29 million of RIMM during the third quarter.

Virgin Media Inc (VMED) is another stock on the list above with a double-digit open short interest. The company is engaged in entertainment and communications business. Its stock lost 12.55% during the past 13 weeks and has a short interest of 12.32%. VMED has a market cap of $6.68B and a P/E ratio of 77.50. Steven Cohen’s SAC Capital had nearly $70 million invested in VMED shares at the end of the third quarter.

Frontier Communications Corp (FTR) lost 23.63% over the past 13 weeks. It has an open short interest of 8.21%. Frontier provides communication services mainly in rural areas as well as small and medium-sized towns and cities. The stock has a market cap of $5.70B and a P/E ratio of 37.92. Jim Simons invested $15 million in FTR shares.

Alpha Natural Resources Inc (ANR), the Appalachian coal supplier, lost 27.43% during the past 13 weeks. It has a market cap of $5.57B, a P/E ratio of 72.12, and an open short interest of 5.17%.

Priceline.com Inc (PCLN) is the stock on the list with the largest market cap. This global online travel company has a market cap of $24.43B and a P/E ratio of 25.97. It lost 9.56% during the past 13 weeks and has an open short interest of 7.83%.

Other underperforming stocks targeted by short sellers include Equity Residential (EQR), Kimco Realty Corp (KIM), Autonation Inc (AN), Forest Laboratories Inc (FRX), Alcoa Inc (AA), and Cliffs Natural Resources Inc (CLF).

Source: 12 Underperforming Stocks Targeted By Short Sellers