Cautious investors may rely on short-selling data to find stocks to avoid. Those bears usually know something that would imply further stock performance ahead. However, betting against companies on their high valuations only does not always work.
In the technology sector, Super Micro Computer (SMCI) took away Tesla’s (TSLA) title as the most shorted large-cap stock. The short float on the AI server supplier is 9.67% of shares or 5.41 million.
The bearish bet on Chevron (CVX) is unusual, although shares trade at fair value. The energy firm needs stronger oil prices to outperform the markets.
Tesla is in third place in the most shorted list. Bears are betting that the EV market will continue to collapse. With consumers avoiding vehicles priced in the six figures, Tesla EV sales will perform poorly. Still, CEO Elon Musk promises TSLA stockholders that a Robo Taxi is on the way.
The bearish bet against Boeing (BA) makes sense. The firm has quality issues. Customers cannot trust the firm on product reliability.
Bears are betting heavily against IBM (IBM). The stock trades at fair value.
Short-sellers did not close their bet against Ford (F). The stock is deeply discounted. However, Ford continually offsets its profit growth from rising warranty-related costs. Poor product quality is a high cost for Ford.
