In a healthy market, stocks move both up and down. Traders who speculate that a stock will go down in price are said to be shorting that stock. And the number of shares being sold short is expressed as a percentage known as short interest.
To understand why short interest is significant, you should remember that traders who short a stock sell it first with the expectation that the price will fall so they can repurchase the stock at a lower price.
If you're an investor, you can view a stock with high short interest in one of two ways. Sometimes, a stock is objectively overvalued. However, if the company has strong fundamentals and your buying thesis hasn't changed, a stock with high short interest can be a buying opportunity.
But the opposite is also true. There are times when high short interest exists because the company is not fundamentally sound. In this case, seeing a stock with high short interest may be a reason for you to sell a stock.
In this special presentation, we're analyzing seven stocks with high short interest and providing insights as to whether the market is getting them right. All the short interest percentages are as of March 31, 2024.
Click the "Continue to Slide #1" button to view the first company.
