After hitting new all time highs this month the stock market indices have just marked several down days in a row – a rarity lately.
Both the Standard and Poor’s 500 and the Dow Jones Industrial Average have sold off for an astonishing 3 straight days. It hasn’t been so bad for the NASDAQ Composite – the index formerly known as “over the counter” – is only off for 2 consecutive days.
Some stocks haven’t been participating in the great rally off of last year’s late December lows – in fact, a check on what’s making the new lows list these days reveals price charts in decline for the better part of quite some time. I would guess that hedge funds involved with serious short selling strategies may have these in sight.
Big Lots never really got going upward too much at all after the late 2018 lows. The downtrend on the weekly price chart is obvious:
The short float is definitely big: at 19.8% it comes in at among the most shorted of stocks on the Big Board. Quarterly earnings are way off and the year looks to come in negative. Analysts have to wonder if that big 6.1% dividend yield can be sustained under the circumstances. You would have to think that hedge funds specializing in short strategies may be involved.
Delphi Technologies is another one unable to keep up with the broader indices and which now comes in at a lower low than the already depressed December, 2018 level.
The short float of 7% is on the high side for an NYSE stock, but it’s not quite in the outrageous area yet. Analysts at Barclay’s recently reduced their rating on Delphi from “overweight” to “equal weight.” Similarly, Oppenheimer analysts took their rating down from “out perform” to, simply, “perform.” Long-term debt greatly exceeds shareholder equity and recent quarterly earnings have been disappointing.
Taubman Centers is now significantly beneath both the late 2017 low and the late 2018 low. While the widely followed major indices rallied, this one fell way behind.
The short float is relatively high for an NYSE-listed equity: 10% of outstanding shares are now held short. Again, that high of a figure is an indicator of sorts that hedge funds may have found a fit for a certain type of investment strategy.
I wrote on this blog at the beginning of this month about stocks with high short floats right here. Each situation, of course, is different and unique.
Stats courtesy of FinViz.com.
I do not hold positions in these investments. No recommendations are made one way or the other. If you’re an investor, you’d want to look much deeper into each of these situations. You can lose money trading or investing in stocks and other instruments. Always do your own independent research, due diligence and seek professional advice from a licensed investment advisor.