One of the most heavily shorted industries is the residential construction industry, thanks to the subprime-mortgage debacle, rising interest rates, overspeculation and a surplus of inventory for sale.
The short-sellers are hoping for a continued drop in the price of homebuilder stocks, but any sudden positive news, such as an interest-rate cut by the
, or even a rumor of one, could send the price of the stocks higher as short-sellers are forced to cover their positions.
For this reason, at Stockpickr we have put together the
, a list of heavily shorted names in the sector.
The second most shorted homebuilder is
( BHS), with a short ratio of 26 and more than 21% of the float sold short. The Virginia-based company specializes in luxury single-family and multifamily construction. The stock has a trailing
price-to-earnings ratio of 5, but the company's revenue has dropped by more than 24% year over year.
The stock appears on
, making this list after CEO Ian Cockwell last month purchased 133,800 shares, or about $4 million worth of stock. This portfolio also lists a couple of other stocks with high short ratios,
, with a short ratio of 15.8, and
( TMRK), with a short ratio of 23.
Brookfield also appears in
, a recent Stockpickr portfolio that also features
, which has a short ratio of 17.
Want more? Check out TheStreet.com TV video. Gregg Greenberg discusses some heavily shorted homebuilder stocks that could be squeezed higher.
Next on the list is
( AVTR). The residential developer, which builds in Florida and Arizona, is No. 3 on our list. It has a short ratio of 22 with 15% of its share float shorted.
The stock has a trailing P/E of only 5. It appears in the Stockpickr portfolio of
holdings, which also contains
Nordic American Tanker Shipping
, a stock with a short ratio of 4.
Avatar is also part of
, a Stockpickr portfolio that includes another residential construction company,
, which has a short ratio of 13.
( WCI) also makes the list of heavily shorted homebuilders.
The stock, which has a short ratio of 14, does not appear to be cheap on paper. However, billionaire investor
recently filed to nominate 10 directors to replace WCI's board.
Icahn has said he believes WCI shares are undervalued and that he planned to talk with WCI's management to suggest how to "unlock" that value. Icahn owns 6.1 million shares, or 14.6% of the total shares outstanding. To view Icahn's entire holdings, including
( MOT) and
, check out the
And for all the names on the list of heavily shorted homebuilder stocks, including the No. 1 stock, check out the
portfolio on Stockpickr.com.
At the time of publication, Altucher and/or his fund had no positions in stocks mentioned, although positions may change at any time.
James Altucher is president of Stockpickr LLC, a wholly owned subsidiary of TheStreet.com and part of its network of Web properties, and a managing partner at Formula Capital, an alternative asset management firm that runs a fund of hedge funds. He is also a weekly columnist for
The Financial Times
and the author of
Trade Like a Hedge Fund
Trade Like Warren Buffett
. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback;
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