|Pitney Bowes, known for its iconic postage meters, could be the subject of big after-hours trading when it reports earnings after the close on Monday.|
- Almost 80% of the shares are owned by institutions.
- Almost 30% of shares outstanding are shorted (the float is almost as large as the shares outstanding).
- As of April 13 more than 50 million shares are shorted, the most in the past 12 months.
- The company reported profits in the last four quarters and for the last three full years.
- Forward Price-to-Earnings ratio is 8.5.
- The stock trades ex-dividend on May 9, two days after earnings. The dividend yield is also 8.7%. It will cost short sellers 37.5 cents to hold their shares into the ex-dividend date, creating a strong incentive to exit before. Unless short sellers believe the share price will drop more than 37.5 cents in the next quarter, or the company will lower or eliminate the dividend, they will not want to maintain the position.
- The dividend payout ratio is only about 50% of earnings, leading me to believe the dividend is not in immediate danger of getting cut.