At Extreme Investor Network, we pride ourselves on providing unique and valuable insights into the world of investing. Today, we are diving into the world of short selling with a focus on Wolfe Research’s list of stocks that are top targets for short sellers.
Short selling involves borrowing shares of a stock, selling them on the open market, and hoping to buy them back at a lower price to profit from the difference. Wolfe Research has compiled a basket of stocks that appeared most frequently on 16 screens for short-sale candidates. These screens analyze factors such as valuation, earnings quality, capital allocation, and sentiment to identify stocks that are at risk.
One standout stock on Wolfe’s list is Tesla, the leading domestic maker of electric vehicles. Despite being a favorite among retail investors, Tesla has appeared on six of Wolfe’s 16 screens. After a significant increase in 2023, Tesla has experienced a drop of more than 29% this year. The average analyst predicts a modest 3% increase in Tesla’s stock price over the next year, with a hold rating being the most common recommendation.
First Solar is another stock that made Wolfe’s list, with appearances on five screens. The solar stock has seen a remarkable 60% increase this year. Despite this, the average analyst foresees a 6% decline in First Solar’s shares over the next year, although the typical recommendation remains a buy rating.
One bullish analyst, Morgan Stanley’s Andrew Percoco, has even increased the price target for First Solar, citing reasons such as artificial intelligence demand and policy support for his optimism. This optimistic outlook implies a potential upside of more than 24% from the current price.
Lastly, the rideshare platform Lyft has also caught the attention of short sellers, appearing on four of Wolfe’s screens. While the stock has only increased by 3% this year, analysts predict a more than 20% jump in Lyft’s shares over the next year, according to LSEG.
Stay tuned to Extreme Investor Network for more unique insights and analyses on investment opportunities and strategies. Diving deep into the world of short selling can provide valuable insights for investors looking to navigate the market with confidence and knowledge.