For tips on stocks to watch out for, short selling trends can give a clear indication of where the market believes a stock is headed. Stocks seeing increased short selling are being viewed with a more pessimistic outlook by the market, and conversely.
We ran a screen on large-cap stocks from the tech sector for those with bearish short trends, with significant increases in shares shorted month-over-month. This indicates that short sellers believe these stocks will soon underperform.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the 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 will underperform like short sellers expect? Use this list as a starting point for your own analysis.
1. EMC Corporation (EMC): Develops, delivers, and supports the information and virtual infrastructure technologies and solutions. Shares shorted have increased from 104.14M to 127.59M over the last month, an increase which represents about 1.15% of the company's float of 2.04B shares.
2. Motorola Mobility Holdings, Inc. (MMI): Provides technologies, products, and services for mobile and wire line digital communication, information, and entertainment applications. Shares shorted have increased from 6.32M to 10.99M over the last month, an increase which represents about 1.73% of the company's float of 269.18M shares.
3. Seagate Technology PLC (STX): Designs, manufactures, markets, and sells hard disk drives for the enterprise, client compute, and client non-compute market applications in the United States and internationally. Shares shorted have increased from 8.92M to 13.12M over the last month, an increase which represents about 1.06% of the company's float of 396.88M shares.
*Short data 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.
