ARRY ($13) - No income, losing money, huge insider dumps, dilution coming, 8x book value, no products..target $6 EAT($47) - Same Store Sales plunge, min wage increases coming, stock overvalued after huge run, insider dumps. Target $30 or $20 post split. RUTH($20.50) - Went up on OSI buyout. People cutting back on luxury dining. Huge debt. Awful balance sheet. Way overpriced. CEO keeps hyping it. Target $15 There are 3 Shorts that will make you some solid returns here...good luck.
Um... don't follow the other ones... but if you do your math, on EAT, if post split is $30... that would make the current value of the stock $60. Today, it closed at $47.87. You aren't really going to short this at $47 are you?:eek:
It may work out for you if you short with a long timeline... but that could be said about all stocks. It's financials aren't extremely strong... but if you look at the penny valuations for EFUT for one example, and know it's hit a high of $48 from pure speculation, valuations in this market may not be as important as perception. EAT is perceived to be relatively unique... everyone and his mom's eaten at Chili's and Macaroni Grill (both of which are so packed EVERY NIGHT OF THE WEEK, that there are lines that wrap the parking lot). Further, it has a relatively rare 4 star S&P Rating, and 21% YTD performance. Of 21 analysts, it's got 5 STRONG buys and not one Sell recommendation (this means nothing to me, but means a lot to some people). EAT further has a very linear rate of growth of between 10-20% a year since 2004. Further, it's PE is only 17.9, it's debt to equity is only .6, it's price/sales is .9, and it pays a dividend of $.54/shr. It is just off it's highs and about to split (bullish sign). While I'm not saying it's not a remote possibility, there are a LOT stronger short candidates around than this one. Like many of the DOW Jones 30. Ie, before this one crashes, most of the S&P will crash first. I've seen articles mentioning this for a short too... and when I see that, I think... hrm, someone wants you short so you are forced to cover. While I'm not planning to long this one... a LOT of people would pick this for a long, due to fundamentals, I wouldn't put this on a short list at all, let alone a list of 5 top shorts.
ARRY has way too much momentum right now to short. Over the long run it may be a great trade but at what price? I learned a long time ago never to trade AGAINST momentum until the stock shows some weakness which this stock is NOT!!!
I like SWHC as a short tomorrow when it starts to run out of momentum. Its up today 9% on news that they're entering the shotgun market.... selling guns to sportsman isnt what drove this stock to its valuation, I think this is good for a quick point tomorrow. Glad to hear thoughts about it though.