The stocks in the financial sector have been the hardest hit during the last couple of months. Many of them have also been heavily shorted.
Often a heavily shorted stock proves to be oversold and can spike up especially quickly due to the short-sellers covering their bearish positions on any rise in stock price. The metric used to examine such a potential short squeeze is the short ratio. Also known as the days-to-cover ratio, this is the number of days it would take the short-sellers to cover their positions based on the stock's current trading volume.
Stockpickr has reviewed the financial sector stocks and extracted those with the highest short ratios and compiled them in a portfolio called the
One of the stocks with the highest short ratios is
Consolidated Tomoka Land
, a land sales company with a short ratio of 45.1. In its most recent quarterly report in late October, the Florida-based company reported earnings of 37 cents a share, down from 42 cents in the same quarter last year. The stock has a price-to-earnings (P/E) ratio of 44 and pays a small yield of 0.5%.
Consolidated Tomoka Land is owned by the
, which is run by David Winters and has generated a one-year return of more than 32%. Wintergreen also owns
, which has a short ratio of 1.5,
, with a short ratio of 3.7, and
, with a 17.7 short ratio.
Another financial stock with a high short ratio is
TrustCo Bank Corp. NY
, which has a short ratio of 34.8. TrustCo Bank also reported a drop in earnings when it posted quarterly results in October.
The bank holding company earned $10.6 million, or 14 cents a share, down from $11.2 million, or 15 cents a share, in the third quarter a year ago. The stock has a P/E of 19 and a yield of 6.6%.
TrustCo Bank also shows up in the
, a Stockpickr portfolio that also includes such stocks as
First Commonwealth Financial
, with a short ratio of 18.3,
, at an 18.2 short ratio, and
First Citizens Banc
, with a 4.8 short ratio.
( CORS) is another stock with a high short ratio, at 32.2. This Chicago-based bank holding company recently completed a 2 million-share repurchase program it launched in April 2004.
A new 5 million-share repurchase program was authorized in late October. The stock has a P/E of 4 and a high yield of 9%.
Corus is owned by
, is an insurance company that is sometimes referred to as a "mini-
." Markel also owns
Fairfax Financial Holdings
( FFH), with a 6.5 short ratio,
, with a 10.5 short ratio, and
, with a short ratio of 1.2.
The see the list of the top financial sector stocks with the highest short ratios, check out the
Please note that due to factors including low market capitalization and/or insufficient public float, we consider Consolidated Tomoka Land to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.
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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