One of the most perennially hated names of the last year has been Salesforce.com (CRM) -- and all the while it's continued to shove its way higher. In the last 12 months, Salesforce has rallied 33.35%, a full 15.3 percentage points more than the S&P has managed to run over the same period. But with a short interest ratio of 11.43, it would take more than two full weeks of buying for shorts to cover their bets right now.
Salesforce.com builds a software product that enables 100,000-plus customers to run business applications that interact with their customer lists, doing everything from sending newsletters to tracking sales. That mission-critical nature of Salesforce's offering digs a big economic moat. So does the firm's position as one of the first major business application vendors to focus on the cloud.But big investments in growth have given CRM a steep price tag by conventional measures. And that's what's spurred shorts to position themselves against this stock. Never mind the fact that customers have huge switching costs, or that cutting back on some of those big growth costs could increase profitability quickly (if nominally). Salesforce's fourth-quarter earnings release next month could be the catalyst for a pop.
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