15 Stocks That Tons Of People Are Shorting Right Now

Mamta Badkar

 Dec. 8, 2011, 2:38 PM |

Image: AP Images

Traders who are short the stock markets right now are probably having a pretty good day.

UBS is out with its latest list of 15 most shorted stocks based on the highest concentration of clients.

If you follow hedge fund giants Whitney Tilson and David Einhorn, then you might recognize a few of these names.

Note: Stocks listed are from a UBS report, based on its highest concentration of clients, as of December 7, 2011. YTD returns are taken from Google Finance, and data on short percent of float is from Yahoo Finance / Fin Viz.

15 Stocks That Tons Of People Are Shorting Right Now

    

1. Verizon Communications

Image: Marc Siry via Plixi

Short percent of float: 1.40%

YTD return: +6.09%

Verizon has seen a sharp decline in its traditional land line phone business. 

To make matters worse it is being drawn into a lawsuit with FairPoint Communications who is blaming Verizon

 for its bankruptcy and filing a $2 billion fraudulent transfer lawsuit.

But Verizon is trying to make strides in the right direction. 

The company is planning to offer a stand alone movie and television streaming service,

 as it looks to widen its subscriber base.

    

2. IBM

Short percent of float: 1.50%

YTD return: +31.51%

IBM's business and government IT spending is expected to slow in the short-term.

But the stock got a boost last month after Warren Buffett revealed that he owns $10.7 billion dollars worth

 of IBM shares, which amounts to 5.5% of the company.

   

3. Johnson & Johnson

Image: AP Images

Short percent of float: 1.50%

YTD return: +3.78%

J&J is in all kinds of trouble. The company has been hit by competitive pricing and the dismal macro environment.

 Its much talked about bid for Synthes Inc. is facing an expansive EU probe.

Now, Wall St. Cheat Sheet reports that insider selling at J&J jumped in the third quarter,

 and institutions like Morgan Stanley have also reportedly sold their shares of the company.

4. Goldman Sachs

Image: AP Images

Short percent of float: 1.50%

YTD return: -38.99%

S&P cut Goldman Sachs' credit rating to A+ with a negative outlook

 because of the impact of the European crisis on the bank's funding and liquidity,

 and because it is more dependent on wholesale funding markets than its peers.

The bank is still being investigated by the Justice Department  

Also, the FHFA is also pursuing action against the bank for directly committing common

5. Intel Corp.

Short percent of float: 2.30%

YTD return: +20.68%

Warren Buffet owns 9.3 million shares of Intel. Some argue the stock is cheap and

 has potential for a short squeeze.  However, the stock has performed extraordinarily well this year.

6. Amazon

Short percent of float: 3.00%

YTD return: +7.73%

Amazon's cloud services investments have been expensive.

 It has seen strong revenue growth but is underperforming the industry average,

 and it isn't lifting its earnings per share. But its investment in developing Kindles seems to be paying off,

 and some say with the holidays approaching it may be time to go long on the stock.

7. Chesapeake Energy

Image: Chesapeake Energy

Short percent of float: 5.00%

YTD return: -3.86%

Chesapeake Energy has actually seen insider buying and some expect the stock 

to outperform the S&P 500 going forward.

But the company is highly leveraged, and falling commodity prices could create a dangerous mix.

 The company will  have to raise more than $1 billion to fund its spending plans.

8. Salesforce.com

Image: AP Images

Short percent of float: 8.97%

YTD return: -6.86%

Salesforce.com has a weak balance sheet and it is an expensive stock.

 Whitney Tilson has been shorting the company because of its supposedly "bogus" projected earnings,

 and insider selling. The company is expected to lose market share as competition from Microsoft heats up.

  

9. Chipotle

Image: AP Images

Short percent of float: 10.00%

YTD return: +58.34%

Chipotle's stock has lost some of its momentum. Like its competitors,

 Chipotle has to deal with rising food costs, and its ability to beat consensus earnings is weakening.

 Investors also worry about Chipotle because of competition it faces from other fast-food brands.

10. Lululemon Athletica

Image: Lululemon Athletica

Short percent of float: 17.60%

YTD return: +34.17%

Lululemon's Q3 sales growth missed expectations. After two quarters of disappointing outlook,

 Lululemon's best days seem to be in the past, and the stock is fast losing momemtum.

11. Lennar Corporation

Image: AP Images

Short percent of float: 18.11%

YTD return: -0.88%

Many see no bottom in the housing market, and Lennar Corp is also considered to have poor

 debt management and profit margins.

12. Express Scripts Inc.

Image: Express Scripts

Short percent of float: 20.40%

YTD return: -15.26%

Investors are concerned that Express Scripts won't be able to finalize its $29.1 billion acquisition of Medco.

The company could also face an earnings cut because of its spat with Walgreens over pharmacy reimbursements.

13. United States Steel Corp.

Image: United States Steel Corp.

Short percent of float: 25.10%

YTD return: -52.79%

United States Steel Corp is also taking a beating from rising pension costs.

 With a 2.42 beta, the company's stock is more volatile than the market, 

and some expect it to get crushed in the short-term if the EU summit disappoints.

14. Green Mountain Coffee Roasters

Short percent of float: 25.50%

YTD return: +72.69%

Wall Street analysts have been bullish on Green Mountain, but David Einhorn has said

the the shares are overvalued in part because of bloated demand expectations.

Critics point to Green Mountain's sky-high valuations and questionable accounting practices.

 The stock has lost a lot of its momentum.  Value investor Whitney Tilson is also short GMCR.

First Solar

Image: First Solar

Short percent of float: 45.30%

YTD return: -64.61%

First solar has 60% sales exposure to Europe and the company stands to take a huge hit if 

Europe enters another recession. The stock got a bounce when Warren Buffett's MidAmerican Energy 

bought Topaz from the company for $2 billion, but it didn't last.