Greenberg: 3 Stocks on New Short Fund's Radar

(This column previously appeared on Herb Greenberg's Reality Check)

SAN DIEGO (TheStreet) -- Ask veteran short seller Andy Matthes what three stocks he think are unusually risky and, after thinking a second, he quickly names them: Family Dollar (FDO), Fastenal (FAST) and Sysco (SYY).

They're among several dozen stocks in the Teton Valley Fund, a new short-selling mutual fund he co-manages with short-selling analyst Gary Cooper.

Like the rest of fund's portfolio, these are big, liquid and, unlike so much of the focus in the short community, not shorts because they believe they're disasters in the making.

Instead, Matthes says they're "companies that go through the natural business cycle and have a hiccup. It doesn't make them bad people or bad companies."

But what it does, if Matthes' and Cooper's financial statement sleuthing is right, is make them ripe for a tumble.

Even in markets like this, which have been devastating for the shorts, stocks that somehow turn in unexpectedly bad or disappointing news do tumble.

Shorting, of course, has been an overall loser's game in recent years. In a note to investors, Matthes wrote: "With the S&P 500 up an average of 18.4% over the past 5 years it is hard to see the value of shorting ... or any hedge for that matter. "

The difference now, he says, is that interest rates and a few other variables "are squarely in the beneficial camp."

He's not alone in thinking that. I know of at least one short-only hedge fund that recently launched and Bill Fleckenstein -- who shut his short hedge fund several years ago -- has said he plans to launch a new fund soon. And Teton isn't the only short-only mutual fund. There are several others, as well as at least one actively-managed short ETF.

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