Taiwanese telco giant Chunghwa Telecom (CHT) is in a similar boat right now. It's a staid firm with reduced growth prospects, but it's also a cash generation machine that outpaces the income streams that U.S. communications stocks are paying out by the shovel-full right now.
Dividend payouts are like kryptonite for short sellers, and with a dividend yield of 5.73%, it doesn't take much time before shorts see their profits get eroded. Maybe that's why it's so surprising that CHT currently sports a short interest ratio of 19.6.Chunghwa is the dominant Taiwanese mobile, internet and fixed-line carrier, serving a mind-blowing percentage of the population. While market share growth is difficult to achieve at this stage, the firm has found success in boosting its average revenues per user by convincing subscribers to increase their level of service. By boosting the percentage of customers who subscribe to 4G LTE on their cellular phones and high-speed broadband internet at home, CHT can continue to provide meaningful growth for investors. A huge net cash position gives Chunghwa plenty of dry powder to pay for network upgrades and to keep dividend payouts smooth. Given the firm's enormous infrastructure portfolio, CHT's balance sheet is immaculate -- and even though stock performance has been lackluster in the last year, its short interest ratio makes it a potential short squeeze name to watch in 2013.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV