This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Crush the S&P With 5 Stocks Everyone Hates

Alliance Data Systems

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Alliance Data Systems (ADS - Get Report) is all about customers - their customers' customers, that is. The firm provides marketing and loyalty services for other companies, handling more than 120 million customer relationships with a specific focus on Canada, where its Air Miles subsidiary operates. From gas stations to airlines to banks, Alliance Data is all about outsourced customer relationships.

That's proven to be a lucrative business for ADS. The firm earns double-digit net margins for its trouble, while at the same time building itself an attractive moat. With clients' customer lists and very long-term contracts as standard, revenues are stickier than they would be if ADS didn't own many of the networks that it administers for firms. ADS has also established itself as a major player in the private-label credit card business, processing transactions on behalf of retailers who don't want the hassle or balance sheet risks of issuing cards themselves (for its part, ADS securitizes its receivables, so little credit risk remains on its balance sheet).

ADS currently sports a short interest ratio of 13.7, which means that it would take short sellers close to three weeks to cover their positions. That puts this $6.7 billion firm directly in line with our market-beating strategy this summer.

To see this week's short squeezes in action, check out the of Large-Cap Short Squeezes portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

RELATED LINKS:



Follow Stockpickr on Twitter and become a fan on Facebook.
At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.
6 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
VMED $0.00 0.00%
ADS $273.34 -0.62%
AVB $173.93 0.92%
GRMN $41.44 -1.10%
SBAC $121.18 0.38%

Markets

Chart of I:DJI
DOW 17,598.20 -91.66 -0.52%
S&P 500 2,098.04 -5.80 -0.28%
NASDAQ 5,115.3820 -12.8990 -0.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs