I have traditionally limited myself to stocks that have long term hold value. Brian Stoffel of the Motley Fool looks at five stocks that could see large swings based on being heavily shorted.
The companies that he lists are
- MAKO Surgical (MAKO) the maker of the RIO System for robotic hip and knee replacements, has been referenced before as a company whose market is going to grow as boomers age and wear out.
- ATP Oil & Gas (ATPG) has zealots for and against and both make strong arguments
- Renren (RENN) is the Facebook of China and could either make it big or stumble with its internal challenges and local competition. Again, not a company I really understand
- ZAGG (ZAGG) offers accessories to iPhone users -- not a market I understand and is going to be volatile at the whim of teenagers
- SodaStream (SODA) has been a company of focus as battles have raged as to whether home soda is going to catch on. My view is that it depends whether soda is about image and not taste -- if you only care about taste, I assume Sodastream is cheaper. If you care about image, how can you compete with the image creation by the big soda companies.
So, why even bother to track these companies? There are three reasons for me:
- I am always interested to learn about companies on the edge and where there are large swings. I might invest in MAKO because I understand and believe the premise. I am not sufficiently interested by or believe in the rest so this is just a watching brief for me
- I want to track how these companies go to get some form of calibration on Brian Stoffel
- I am always curious to see what happens in the longer term and I can come back to this later and see how they are doing a year from now.
Portfolio Performance Comparison
|Portfolio/Fund Name||YTD |
|1Yr AR||1Yr Sharpe||3Yr AR||3Yr Sharpe||5Yr AR||5Yr Sharpe|
I don't think that there is enough data here to come to any conclusion. In fact, for myself, I want to look at the graphs and get some qualitative data. Frankly, the most I am going to do from this is decide whether I want to watch any of these stocks.
Three Month Chart
SODA is BLACK
One Year Chart
Three Year Chart
SODA is BLACK
Five Year Chart
SODA is BLACK
When I look at the longer term graphs, only MAKO and ZAGG are of any interest. As I said earlier, I have meant to put MAKO on my watch list and this is a reminder so to do. ZAGG is a curiosity for me as I don't really understand the market and I don't know anything about the market for skins and shields for smartphones. I can quite believe that it will be a huge market.
Those are the two that make it to my watchlist.
Disclaimer: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.