Trading Ideas of the Day

Stocks with Bullish Short Trends
Specialty: STOCKS
Published: 2/4/2013
By staff at Kapitall.com
Tickers mentioned: ABMD, ATML, DV, EDU

We continue to look for ways to get involved during earnings season. If you are trying to do the same, this list might be a helpful starting point, writes the staff at Kapitall.com.

We started with a list of stocks expected to report earnings this week. We then screened for bullish short trends, with significant decreases in shares shorted month-over-month. We were left with the three stocks listed below.

But why the bullish short trends? We went further to look for fundamental catalysts for these companies.

Analyst ratings sourced from Zacks Investment Research.

chart
Click to Enlarge

Do you think these stocks will outperform like short sellers expect? Use this list as a starting point for your own analysis.

1. Abiomed Inc. (ABMD): Engages in the research, development, and sale of medical devices that provide circulatory support to acute heart failure patients across the continuum of care in heart recovery. Market cap at $547.45M, most recent closing price at $13.80.

Shares shorted have decreased from 8.59M to 7.61M over the last month, a decrease, which represents about 2.82% of the company's float of 34.72M shares. Days to cover ratio at 7.02 days. The company is expected to report earnings on February 6, 2013.

Investors are now focusing on any new information on management's progress towards submitting the Pre-Market Approval (PMA) application for its miniature heart pump. The product will have to go through a more rigorous process at the FDA, versus the less 510K clearance approval.

2. Atmel Corporation (ATML): Designs, develops, manufactures, and markets a range of semiconductor integrated circuit (IC) products. Market cap at $2.97B, most recent closing price at $6.75.

Shares shorted have decreased from 19.58M to 14.82M over the last month, a decrease, which represents about 1.13% of the company's float of 420.79M shares. Days to cover ratio at 2.53 days. The company is expected to report earnings on February 6, 2013.

Atmel recently announced that the company has laid off 200 workers due to "weak economic conditions."

The stock is trading around $6.85 versus its 52-week range of $4.37-$10.74, down 30% in the past one-year. The company has ample liquidity with $287 million in cash, and $309 million in current liabilities. Maybe the short sellers expect the end of bad news for the company.

3. DeVry, Inc. (DV): Provides educational services worldwide. Market cap at $1.53B, most recent closing price at $24.19.

Shares shorted have decreased from 7.07M to 6.45M over the last month, a decrease, which represents about 1.09% of the company's float of 56.81M shares. Days to cover ratio at 7.29 days. The company is expected to report earnings on February 6, 2013.

The top holders of the stock remain FMR, LLC, Ariel Investments, and BAMCO, Inc. One of the competitors of the company is New Oriental Education & Technology (EDU), which reported a loss of $0.06 versus consensus of loss of $0.04. The company was most hurt by the higher selling and marketing costs that have pressured the company's bottom line. DeVry's bottom line is also on watch by analysts. The mean target price on DeVry is $26, with the lowest price target at $22.

(Short data sourced from Yahoo! Finance, all other data sourced from Finviz.)

Find more stock analysis and screens at Kapitall.com.

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