During times of uncertainty and volatility, investors act irrationally and can sometimes cause huge discrepancies between the value and the price of a stock
SmallCapPower | May 17, 2016: As global stock market volatility continues, small cap stocks often get hit harder than most. Seeing that momentum investors tend to follow the crowd, high levels of accumulated short interest can arise, thereby signifying a possibly oversold stock. We encourage investors to use the short interest ratio (quantity of stock shares sold short but not covered over total stock shares) to gauge the level of pessimism on a particular stock. Those stocks with an inflated short interest ratio, such as the ones on our list, are prone to heavy upward swings on positive news, as short sellers cover their positions one by one.
Here are the 5 Small Cap Stocks:
Outerwall Inc. (NASDAQ:OUTR) – $38.29
Personal Services- Retail
Outerwall Inc. is a provider of automated retail solutions. The Company’s business segments are Redbox, Coinstar and ecoATM. Its offerings include Redbox business, which enables consumers to rent or purchase movies and video games from self-service kiosks (Redbox segment); Coinstar business, which enables consumers to convert their coins to cash and convert coins and cash to stored value products at self-service kiosks (Coinstar segment), and ecoATM business, which enables consumers to sell electronic devices for cash at self-service kiosks, and purchase and sell electronic devices for cash through an online solution under its Gazelle brand.
Market Cap $661,059,994
Short Interest (%): 45.7%
EPS (TTM): 5.93
Interval Leisure Group Inc. (NASDAQ:IILG) – $14.93
Leisure & Recreation
Interval Leisure Group, Inc. (ILG) is a provider of non-traditional lodging, encompassing a portfolio of leisure businesses from exchange and vacation rental to vacation ownership. The Company operates through two segments. The Exchange and Rental segment offers access to vacation accommodations and other travel-related transactions and services to leisure travelers, by providing vacation exchange services and vacation rental, working with resort developers and operating vacation rental properties. It operates additional exchange programs, including the Hyatt Residence Club. The Vacation Ownership segment engages in the management of vacation ownership resorts; sales, marketing, and financing of vacation ownership interests, and related services to owners and associations.
Market Cap: $839,646,465
Short Interest (%): 34.4%
EPS (TTM): 1.37
Cliffs Natural Resources Inc. (NYSE:CLF) – $2.99
Iron & Steel- Retail
Cliffs Natural Resources Inc. is a mining and natural resources company, which supplies iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota. The Company’s segments include U.S. Iron Ore and Asia Pacific Iron Ore. Cliffs is a producer of iron ore pellets, primarily selling production from U.S. Iron Ore to integrated steel companies in the United States and Canada. The Company manages approximately five iron ore mines located in Michigan and Minnesota.
Market Cap: $529,398,796
Short Interest (%): 33.8%
EPS (TTM): 0.67
Atwood Oceanics Inc. (NYSE:ATW) – $11.88
Oil & Gas Drilling
Atwood Oceanics, Inc. is a global offshore drilling contractor engaged in the drilling and completion of exploratory and developmental oil and gas wells. The Company has a fleet of approximately 13 mobile offshore drilling units located around the world. Its fleet includes Ultra-Deepwater Rigs, Deepwater Semisubmersibles and Jackups.
Market Cap: $701,752,658
Short Interest (%): 33.5%
EPS (TTM): 3.68
JAKKS Pacific Inc. (NYSE:JAKK) – $7.26
Toys & Juvenile Products
JAKKS Pacific, Inc. is a multi-line, multi-brand toy company that designs, produces, markets and distributes toys and related products, pet toys, consumables and related products, electronics and related products, kids indoor and outdoor furniture, and other consumer products. The Company operates through two business segments: traditional toys and electronics, and role play, novelty and seasonal toys.
Market Cap: $148,030,245
Short Interest (%): 32.7%
EPS (TTM): 0.32