If you are looking to invest in dividend paying stocks, a good starting point for potential candidates is to analyze stocks in which short sellers are covering their short positions. This indicates that short sellers, who benefit when share prices drop, think there's more upside than downside potential ahead.
In order to construct this list we looked for stocks with the following characteristics:
- Dividend yield above 2%
- Short float above 5%
- Decrease of the shorted shares over the last month representing greater than 1% of share float
To access a complete analysis of this list's recent performance, click here. To compare changes in dividend yield over the past two years, press play, or click through for more tools.
Short sellers are signaling the upside potential on these names outweighs the downside. Do you agree? 1. Guess' Inc. (GES): Engages in the design, marketing, distribution, and licensing of apparel and accessories for men, women, and children. Market cap at $2.3B, most recent closing price at $26.91. Dividend yield: 2.97%. Short float: 14.35%. Shares shorted have decreased from 9.67M to 8.60M over the last month, a decrease which represents about 1.86% of the company's float of 57.38M shares. Days to cover ratio at 6.86 days.
2. Hot Topic Inc. (HOTT): Operates as a mall- and Web-based specialty retailer in the United States. Market cap at $566.53M, most recent closing price at $13.93. Dividend yield: 2.3%. Short float: 15.2%. Shares shorted have decreased from 6.58M to 5.70M over the last month, a decrease which represents about 2.6% of the company's float of 33.87M shares. Days to cover ratio at 4.41 days.
3. Intersections Inc. (INTX): Provides subscription based consumer protection services and other consumer products and services primarily in the United States. Market cap at $172.75M, most recent closing price at $9.56. Dividend yield: 8.37%. Short float: 9.93%.
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