There might be even more downside for the small cap stocks on our list
SmallCapPower | May 23, 2017: Follow the smart money? It is a typical Hedge Fund strategy to bet that a stock will fall. Typically, these investors are more sophisticated than most due to the big downside risk associated with short selling. The short interest shows the quantity of shares investors have sold short and not yet covered, and is an indicator of a bearish outlook for a stock. Today we have identified five small cap stocks with the highest short interest in the United States, according to data from Thomson Reuters.
Savara Inc. (NASDAQ: SVRA) – $5.18
Biotechnology & Medical Research
Savara Inc., formerly Mast Therapeutics, Inc., is a clinical-stage pharmaceutical company focused on the development and commercialization of novel therapies for the treatment of patients with rare respiratory diseases. Its pipeline includes AeroVanc, Molgradex and AIR001. AeroVanc is an inhaled formulation of vancomycin, which the Company is developing for the treatment of persistent methicillin-resistant Staphylococcus aureus, lung infection in cystic fibrosis patients. Molgradex is an inhaled formulation of recombinant human granulocyte-macrophage colony-stimulating factor. It is developing Molgradex for the treatment of autoimmune pulmonary alveolar proteinosis, a rare lung disease.
- Market Cap: $78,493,912
- Total Revenue (LTM): $39,601,720
- Debt to equity: 3.0%
- YTD Price Change: -14.7%
- Short Interest: 77.2%
Rent-A-Center Inc. (NASDAQ: RCII) – $10.89
Miscellaneous Specialty Retailers
Rent-A-Center, Inc. is a rent-to-own operator in North America that provides an opportunity to obtain ownership of products, such as consumer electronics, appliances, computers (including tablets), smartphones and furniture (including accessories), under rental purchase agreements. The Company operates in four segments: Core U.S., Acceptance Now, Mexico, and Franchising. As of December 31, 2016, the Company operated over 2,463 Company-owned stores in the United States, Canada and Puerto Rico. The Company’s Mexico segment consists of the Company-owned rent-to-own stores in Mexico. As of December 31, 2016, the Company operated 130 stores in this segment.
- Market Cap: $579,313,620
- Total Revenue (LTM): $2,869,586,000
- Debt to equity: 273.4%
- YTD Price Change: -3.2%
- Short Interest: 43.1%
RH (NYSE: RH) – $57.14
Miscellaneous Specialty Retailers
RH, formerly Restoration Hardware Holdings, Inc., is a retailer in the home furnishings marketplace. As of January 28, 2017, the Company had two segments: RH Segment and Waterworks. It offers merchandise assortments across a range of categories, including furniture, lighting, textiles, bathware, decor, outdoor and garden, tableware, and child and teen furnishings. The Company classifies its sales into furniture and non-furniture product lines. The Furniture category includes both indoor and outdoor furniture. The Non-furniture category includes lighting, textiles, fittings, fixtures, surfaces, accessories and home decor.
- Market Cap: $2,051,464,221
- Total Revenue (LTM): $2,138,312,000
- Debt to equity: 82.5%
- YTD Price Change: 86.1%
- Short Interest: 42.1%
GNC Holdings Inc. (NYSE: GNC) – $6.99
Food Retail & Distribution
GNC Holdings, Inc. is a specialty retailer of health, wellness and performance products, which include protein, performance supplements, weight management supplements, vitamins, herbs and greens, wellness supplements, health and beauty, food and drink and other general merchandise. The Company’s operations consist of purchasing raw materials, formulating and manufacturing products and selling the finished products.
- Market Cap: $478,098,664
- Total Revenue (LTM): $2,515,949,000
- Debt to equity: 0.0%
- YTD Price Change: -36.7%
- Short Interest: 40.3%
Lannett Company Inc. (NYSE: LCI) – $19.85
Pharmaceuticals
Lannett Company, Inc. develops, manufactures, markets and distributes generic versions of brand pharmaceutical products. The Company manufactures and/or distributes prescription products with the exception of a small portfolio of over-the-counter products manufactured by its subsidiary, Silarx Pharmaceuticals, Inc. As of June 30, 2016, the Company’s products included Acetazolamide Tablets; Butalbital, Acetaminophen and Caffeine Tablets; Butalbital, Aspirin and Caffeine Capsules; C-Topical Solution; Digoxin Tablets; Glycolax Rx; Isosorbide Mononitrate CR; Levothyroxine Sodium Tablets; Methylphenidate HCL CD; Methylphenidate ER; Nifedipine CR; Omeprazole DR; Oxbutynin ER; Pantoprazole DR; Pilocarpine HCl Tablets; Triamterene w/Hydrochlorothiazide Capsules, and Ursodiol Capsules.
- Market Cap: $739,026,834
- Total Revenue (LTM): $667,110,000
- Debt to equity: 191.7%
- YTD Price Change: -10.0%
- Short Interest: 38.3%
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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