Interested in gaining exposure to emerging markets? We ran a screen with that idea in mind.
We began by searching for US-traded stocks of companies based in China. We then screened for those with current ratios above 3. The current ratio is current assets/current liabilities, so ratios above 3 indicate the company has at least 3 times the liquid assets to cover their short-term liabilities.
Then we screened for those with bullish sentiment from short sellers, with significant decreases in shares shorted month-over-month. This indicates that short sellers are less bearish on these names than they were a month ago.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
Tool provided by Kapitall (kapitall.com).
Do you think these stocks will continue to see positive sentiment? Use this list as a starting point for your own analysis.
List sorted by decrease in shares shorted as a percent of share float.
1. Qihoo 360 Technology Co. Ltd (QIHU): Provides Internet and mobile security products in the People's Republic of China. Market cap at $1.88B, most recent closing price at $15.75. Current ratio at 7.92. Shares shorted have decreased from 16.26M to 15.31M over the last month, a decrease which represents about 2.15% of the company's float of 44.19M shares. Days to cover ratio at 9.6 days.
2. Sohu.com Inc. (SOHU): Engages in the brand advertising, online gaming, sponsored search and wireless businesses in China. Market cap at $1.41B, and most recent closing price at $37.23. Current ratio at 3. Shares shorted have decreased from 5.77M to 5.29M over the last month, a decrease which represents about 1.62% of the company's float of 29.68M shares. Days to cover ratio at 6.72 days.
3. Renren Inc. (RENN): Operates a social networking Internet platform in China. Market cap at $563.06M, most recent closing price at $4.29. Current ratio at 17.71. Shares shorted have decreased from 21.96M to 19.03M over the last month, a decrease which represents about 1.12% of the company's float of 261.32M shares. Days to cover ratio at 2.02 days.
*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.