The first two trading weeks 2013 saw short-selling volume decline substantially for a number of big-name technology stocks. The decline could be due to investors winding down their bearish hedge against another bullish position. It could also mean investors expect the share price to increase in the near-term. Below are five companies worth looking at in greater detail. As it will be discussed, bigger moves in either direction are expected for these stocks. This could provide a trading opportunity for investors. [More Lists: 3 Buying and 3 Bearish Ideas as Samsung Earns Title of Top Chip Buyer]
It's Official: Action Alerts PLUS beats the S&P 500 with Dividends Reinvested! Jim Cramer and Stephanie Link were up 16.72% in 2012. Were you? See what they are trading for 14-days FREETable 1: 1. Microsoft Corporation ( MSFT ): Market cap at $233.28B, most recent closing price at $27.85. Short-selling volumes declined by 14.6% for Microsoft Corporation, ahead of quarterly earnings. When the software giant reported on January 24, Microsoft demonstrated continued revenue strength in most of its divisions. Windows revenue rose 24% (including pre-sales). Its Office division rose 3%, server and tools up 9%, and online services up 11%. The company clearly benefited from ongoing corporate spending, while the PC environment was weak. Investors should be positive on Microsoft. They are more interested in the potential for Windows Phone 8 and Surface RT/Pro in 2013. The Xbox refresh will also be announced in a few months.
2. Research In Motion Limited ( RIMM): Market cap at $7.22B, most recent closing price at $13.78. Research In Motion Limited is viewed by many as lacking prospects. Shares were bid up to $18.32 recently, as short-selling volumes declined 1.4% ahead of the run-up. The run-up was a classic rise before the rumor, sell after the news. The Blackberry 10 release on January 30 marked a new paradigm for the company and possibly for the smartphone market.
Investors should be cautious. The company reports on March 24, and the benefits of Blackberry 10 will not be known until the quarter after.
4. First Solar, Inc. ( FSLR): Market cap at $2.43B, most recent closing price at $27.91. FSLR shares are losing their shine after peaking at nearly $35 at the start of the year. Short-selling volume declined 14.7% between December 31 2012 and January 15 2013. Prospects for First Solar are strong. Investors should wait for shares to settle before adding a position.
5. Ctrip.com International Ltd. ( CTRP): Provides travel services for hotel accommodations, airline tickets, and packaged tours in the People's Republic of China. Market cap at $2.87B, most recent closing price at $19.99. CTRP plunged from $24 to around $20 recently, after short-sellers reduced their bearish bet. Investors should be reminded that Ctrip.com is not like Priceline ( PCLN) or Expedia ( EXPE). Shares declined after Oppenheimer said its coupon program will extend to plane tickets. A price war would substantially reduce earnings and threaten the viability of the Chinese online travel firm sector.
( List compiled by Kapitall Contributor Chris Lau)