This Day On The Street
Continue to site right-arrow
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
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

5 Heavily Shorted Stocks That Hedge Funds Love

Stocks in this article: HLFCHKSLCANILEJCP

It looks like Cohen has purchased 2.1 million shares of U.S. Silica since the beginning of April. Cohen's bet on U.S. Silica is most likely for the company's increasing role in fracking, since its commercial silica is used as "frack sand" in the hydrofracking process that is popular use among oil and gas players throughout the U.S.

This company just delivered a profit but missed Wall Street expectations, and failed to beat revenue expectations. Adjusted EPS jumped 5.56% to 38 cents per share in the quarter vs. EPS of 36 cents per share in the year-earlier quarter. Revenue rose 24.09% to $129.9 million from the year-earlier period, which missed expectations of $134.57 million.

From a technical perspective, SLCA has been trending sideways and consolidating for the last four months, with shares moving between $24.71 on the upside and $18.12 on the downside. That's a big range, so traders should look for a short-squeeze if SLCA can manage to break out above the upper-end of its sideways trading chart pattern. That breakout will trigger if SLCA manages to take out some near-term overhead resistance levels at $23.83 to $24.71 a share with high volume. If that breakout hits, then SLCA will set up to re-test its all-time high at $28.50 a share.

The real short-squeeze for SLCA will start once it takes out $28.50 with big volume. Look for volume on that move that hits near or above its three-month average action of 1.36 million shares. If we get that move anytime soon, then SLCA could easily tag $40 to $50 a share as the bears rush to cover some of their short bets.

Blue Nile

Another heavily shorted stock that Cohen is getting involved in here is Blue Nile ( NILE), an online retailer of diamonds and jewelry. This stock has been uptrending during the last six months, with shares up by 16%.

Blue Nile has a market cap of $475 million and an enterprise value of $437 million. This stock trades at a premium valuation, with a trailing price-to-earnings of 49.71 and a forward price-to-earnings of 34.80. Its estimated growth rate for this year 30.2%, and for next year it's pegged at 30.5%. The current short interest as a percentage of the float for Blue Nile is very high at 18.5%.

5 of 8

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs