Many investors like to find stocks that have upward momentum, but it is difficult to know when that momentum is losing speed. Luckily, you can take hints from collective trading activities of sophisticated investor groups, like short sellers. We created a list of companies that meet these criteria.
To find CONSUMER GOOD stocks that have upward momentum, we checked for those that are rallying. Rallying means that the stock is trading above its 20-, 50-, and 200-day simple moving averages.
Additionally, we wanted stocks that could provide us a little more confidence. Short sellers are usually sophisticated investors because they have to go through background and credit checks to be able to short a stock. Shorting requires using margin, which is a form of credit, so there is an added level of risk involved in shorting. If a short seller is covering, or buying back, their short position, then it’s safe to say that they think that the stock has reached what they think is its lower limit.
Additionally, short covering acts as buying volume on a stock, so if enough short sellers are covering, then it could produce a large amount of buying volume that sends shares even higher, prompting more short sellers to cover their position. This is referred to as a short squeeze.
Business Section: Investing Ideas
Below is a list of stocks that we made using the ideas above. As a recap, we started with rallying stocks that have market caps over $300 million. Then we checked the most recent month-over-month short transaction data for short sellers that are covering their positions.
Short sellers are becoming more optimistic (or rather, less pessimistic) about these stocks. Do you think these names will keep up their momentum? Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.
List Average 1-Year Return: 38%. Diversification score: 48%.
1. Bunge Limited (BG, Earnings, Analysts, Financials): Engages in the agriculture and food businesses worldwide. Market cap at $9.65B, most recent closing price at $66.07. Shares are rallying 0.84% above its 20-day moving average, 1.7% above its 50-day moving average, and 4.99% above its 200-day moving average. Shares shorted have decreased from 4.86M to 3.41M over the last month, a decrease which represents about 1.06% of the company’s float of 136.98M shares. Days to cover ratio at 3.18 days.
2. Callaway Golf Co. (ELY, Earnings, Analysts, Financials): Designs, manufactures, and sells golf clubs and golf balls. Market cap at $438.59M, most recent closing price at $6.18. Shares are rallying 1.86% above its 20-day moving average, 4.88% above its 50-day moving average, and 0.87% above its 200-day moving average. Shares shorted have decreased from 10.37M to 8.16M over the last month, a decrease which represents about 3.44% of the company’s float of 64.21M shares. Days to cover ratio at 16.8 days.
3. Perry Ellis International Inc. (PERY, Earnings, Analysts, Financials): Engages in designing, sourcing, marketing, and licensing apparel products for men and women in the United States and internationally. Market cap at $344.77M, most recent closing price at $21.89. Shares are rallying 0.84% above its 20-day moving average, 8.22% above its 50-day moving average, and 20.99% above its 200-day moving average. Shares shorted have decreased from 1.18M to 875.69K over the last month, a decrease which represents about 2.83% of the company’s float of 10.77M shares. Days to cover ratio at 10.01 days.
4. Boston Beer Co. Inc. (SAM, Earnings, Analysts, Financials): Produces and sells alcohol beverages primarily in the United States, Canada, Europe, Israel, the Caribbean, the Pacific Rim, and Mexico. Market cap at $1.39B, most recent closing price at $107.88. Shares are rallying 3.62% above its 20-day moving average, 1.42% above its 50-day moving average, and 3.28% above its 200-day moving average. Shares shorted have decreased from 3.07M to 2.95M over the last month, a decrease which represents about 1.42% of the company’s float of 8.43M shares. Days to cover ratio at 26.9 days.
5. Spectrum Brands Holdings, Inc. (SPB, Earnings, Analysts, Financials): Operates as a consumer products company worldwide. Market cap at $2.06B, most recent closing price at $40.01. Shares are rallying 0.47% above its 20-day moving average, 5.37% above its 50-day moving average, and 19.4% above its 200-day moving average. Shares shorted have decreased from 1.84M to 1.63M over the last month, a decrease which represents about 1.% of the company’s float of 20.94M shares. Days to cover ratio at 8.99 days.
6. Winnebago Industries Inc. (WGO, Earnings, Analysts, Financials): Manufactures motor homes, which are self-contained recreation vehicles used primarily in leisure travel and outdoor recreation activities. Market cap at $373.39M, most recent closing price at $12.77. Shares are rallying 3.98% above its 20-day moving average, 11.4% above its 50-day moving average, and 29.66% above its 200-day moving average. Shares shorted have decreased from 2.81M to 2.17M over the last month, a decrease which represents about 2.21% of the company’s float of 28.98M shares. Days to cover ratio at 10.68 days.
Short data sourced from Yahoo! Finance, all other data sourced from Finviz.
Analyze These Ideas: Getting Started
- Read descriptions for all companies mentioned
- Access a performance overview for all stocks in the list
- Compare analyst ratings for the companies mentioned
- Compare analyst ratings to annual returns for stocks mentioned
- Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, Filings
- Bunge Limited (BG, Chart, Download SEC Filings)
- Callaway Golf Co. (ELY, Chart, Download SEC Filings)
- Perry Ellis International Inc. (PERY, Chart, Download SEC Filings)
- Boston Beer Co. Inc. (SAM, Chart, Download SEC Filings)
- Spectrum Brands Holdings, Inc. (SPB, Chart, Download SEC Filings)
- Winnebago Industries Inc. (WGO, Chart, Download SEC Filings)
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