21 septembrie 2024
Steven Cress is the Head of Quantitative Strategies and Market Data at Seeking Alpha. Steve is also the creator of the platform’s quantitative stock rating system and many of the analytical tools on Seeking Alpha. His contributions form the cornerstone of the Seeking Alpha Quant Rating system, designed to interpret data for investors and offer insights on investment directions, thereby saving valuable time for users.
The above table displays 30 stocks with short interest above 10%. FINRA requires firms to report short interest positions in all customer and proprietary accounts in all equity securities twice a month. In an effort to capture this data, Seeking Alpha’s quant model’s algo is updated daily, ensuring we do not miss when the short interest data is reported. Updating our model daily also ensures that all of the quant data is near real-time. The Quant Ratings and Factor Grades provide a springboard for further investigation.
The higher the percent of short interest the greater the percentage of people shorting the stock. At the same time, new investors may also start buying the stock, either on speculation or investment fundamentals, driving the stock even higher. As you can imagine, a short squeeze is bad news for short sellers- but very good news for investors who took a bullish bet on the stock.
Seeking Alpha’s Very Bullish Quant recommendations are up YTD 50.65% compared with the S&P 500, up 26.41%. The process of making sense of statistics that have been collected, analyzed, and scored has served as a solid foundation in identifying trends and making transparent predictions. It has also allowed me to develop user-friendly web-based tools that provide individuals with the indicators and signals required to interpret a stock’s strength or weakness instantly. The results in the below SA chart speaks volumes to our success.
WHAT’S A SHORT SQUEEZE?
Get a brief on the top business stories of the week, plus CEO interviews, market updates, tech and money news that matters to you. „In recent years elevated crowding, low turnover, and high concentration have been consistent patterns, boosting the risk that one fund’s unwind could snowball through the market,” Kostin wrote. Kiplinger is part of Future plc, an international media group and leading digital publisher. Bram Berkowitz has no position in any of the stocks mentioned.
Many were betting on GameStop’s stock to fall by “shorting” it. GameStop, based in Grapevine, Texas, sells video games at more than 5,000 stores, and the pandemic has been keeping customers away. More worrisome is the long-term shift by customers away from brick-and-mortar stores and toward buying games online. With over 30 years of experience in equity research, quantitative strategies, and portfolio management, Steve is well-positioned to speak on a wide range of investment topics. Troika has yet to see a boardroom fight end in a hostile takeover.
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But it remains to be seen how these efforts play out in the long run. In the end, there may be no way to prevent people from pushing a stock too high and potentially burning themselves. Instead, Spatt said it may be better first to properly educate all these novice investors about the risks of bubbles and overzealous trading. The Securities and Exchange Commission has said it’s noticed all the volatility in the market and is taking a closer look. It’s the SEC’s job to protect investors, and the expectation across Wall Street is that investors holding GameStop at these lofty prices are likely to be hurt when its price falls. A big reason for that is how deeply hated GameStop’s stock was by hedge funds and other professional investors on Wall Street.
- The results in the below SA chart speaks volumes to our success.
- The digital distribution channel reportedly accounts for 90% of new console gaming titles, according to technology website Ars Technica.
- As a result, the demand for shares could go up and send prices higher.
GameStop is likely moving higher as meme-stock and retail investors look for a big squeeze in what has been a depressed market. The stock hasn’t moved higher this week until today, so perhaps the new wallet offering is catching investor interest, although it’s likely more related to the buzz about short interest and the cost to borrow shares. The volume of shares being traded had risen to 5.26 million as of this writing, with recent volume averaging about 3.8 million shares.
It simply increases the number of shares outstanding and reduces the dollar value of a company’s stock price. But lately it’s been more about inflicting pain on short sellers, hedge funds and other big financial firms. Many talk about it in terms of evening the ledger with the financial elite, who benefited from years of gains as other people fell further behind. Below is an example of how the quant factor grades and quant rankings are displayed.
Still, the rally of heavily shorted stocks has taken place against a „backdrop of very low levels of aggregate short interest,” he added, though noted there could still be significant losses for hedge funds. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. Steve is passionate and dedicated to removing emotional biases from investment decisions. His presentations are ideal for a variety of settings, including podcasts, webinars, financial forums, corporate meetings, investment leadership gatherings, and larger public events.
How Some Brilliant Computing Power and A Smart Algo Identified Top Short Squeeze Stocks That Surged
You can quickly see where a stock is strong or weak, and with one click, you can view the underlying data and sector averages to perform your evaluation. The Quant Ratings and Factor Grades are appropriate for both short- and long-term investors. The Value, Growth, and Profitability factors identify mispriced securities, and the Momentum and EPS Revisions factors recognize timeliness. These core investment metrics are measured to support our quantitative algorithms, and SA offers top-notch tools with customizable screens and filters to create a portfolio suited to your needs.
When a stock is very heavily shorted, a rise in its price can force short sellers to get out of their bets. To do that, they have to buy the stock, which pushes the stock even higher and can create a feedback loop. As GameStop’s short sellers have gotten squeezed this month, smaller and first-time investors have been egging each other on to to keep the momentum going. In a short sale, they borrow a share of GameStop and then sell it. Later, if the stock price does as they expect, they can buy the stock at a lower price and keep the difference. GameStop is one of the most heavily shorted stocks on Wall Street.
And TRKA stock shares have been non-compliant with Nasdaq listing requirements for far less time than beaten-down BBIG stock. In 2022, all that changed when Troika bought out Converge, LLC, an ad tech firm generating around $21 million in profits annually. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
For a brief moment, it seemed as if GameStop could relive its glory days of growth… whether in Web3 gaming or non-fungible tokens (NFTs). And as for Troika, the Converge merger would turn negative profits into positive ones as soon as merger costs flowed through. A long-time https://www.wallstreetacademy.net/ financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. As a senior writer at AOL’s DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.
