The Next GameStop? 25 Stocks With High Short Interest

what is the next gamestop

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The stock still has very good fundamentals on growth, value and profitability. In the last 90 days, 5 analysts have revised their earnings estimates up and zero have revised down. Trailing Twelve month Revenue and Forward earnings growth are strong with ‘A’ quant grades and 30% and 68% growth respectively. The return on highly shorted stocks is currently the highest ever recorded, he said.

Today, it looks like interest in the stock on social media is building, as short interest has risen to the highest it’s been in more than a year, according to analytics company Ortex. The number of shares being shorted on GameStop is about 26.4% of the free float. The rising short interest has also significantly increased the cost to borrow shares, which is typically done in the practice of short-selling. Short interest can lead to a short squeeze, which has propelled several big GameStop moves in the past.

Is GameStop a Buy?

“In the last three months, a basket containing the 50 Russell 3000 stocks with market caps above $1 billion and the largest short interest as a share of float has rallied by 98%.” Rising interest rates amid expectations for tighter monetary policy have hit growth stocks as a whole in 2022. But it has really clamped down on pricey high-short-interest meme stocks from last year.

Dillard’s is also a Very Bullish quant recommendation and has the highest level of short interest at 53%. Perhaps the naysayers on the stock dislike it because it is a traditional department store retailer. However, the company looks very solid in regards to growth, value, profitability, and analysts expecting the company to do well going forward. The stock is up 75% from our Very Bullish recommendation in August 2021. The factor grades below exhibit the data is very strong for Dillard’s and the stock also has great fundamentals. The ad tech firm currently trades for a roughly $100 million market capitalization, valuing its shares at about 0.3X price-to-sales (P/S).

what is the next gamestop

Both firms would go on to experience short squeezes in their stock, an essential ingredient to getting retail investors excited. The result is something of a shakeup in the list of stocks with highest short interest, as measured by the percentage of shares outstanding sold short. Although a number of meme stocks remain, many have been replaced by more traditional short bets. But investors shouldn’t forget that GameStop’s fundamentals and prospects remain the same as before.

When they buy stocks “on margin,” they’re using borrowed money, which can supercharge their gains and losses. With options, an investor can buy the right to buy the stock at a later date at a certain price. If the stock hits that target, investors can reap a bigger return than if they simply bought a share. At the same time, champions of the 99% are cheering louder from the sidelines, saying the moves mean that hedge funds, Wall Street and the 1% are finally getting their comeuppance. Steve was previously the Founder and CEO of CressCap Investment Research until its acquisition by Seeking Alpha in 2018 for its unparalleled quant analysis and market data capabilities. It is one of the highest levels of short interest amongst our Very Bullish quant recommendations.

Is TRKA Stock the Next GameStop? Why Reddit Thinks So.

This is what happened during the ‘Reddit Revolution,’ which we saw this past year. If an investor catches the right side of a short squeeze you can make a vast profit. Many of these stocks have poor investment fundamentals and you do not want to be around when the light bulb goes off and investors realize the stock is not going to perform well in the long run. If you hold too long, you will likely lose because the short squeeze ends, and then the stock price falls; you could lose all of your gains.

  1. With over 30 years of experience in equity research, quantitative strategies, and portfolio management, Steve is well-positioned to speak on a wide range of investment topics.
  2. As a senior writer at AOL’s DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.
  3. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
  4. A cheap share price, the retention of Jeffries and the recent short squeeze all seem like a repeat of GME in 2021.

It’s at least as risky as shorting stocks with high short interest in the first place. In simpler words, GameStop shareholders of record on July 18 will receive three additional shares for each share of the company that they own following the close of trading on July 21. GameStop stock will start trading on a split-adjusted basis on July 22. Other heavily shorted stocks have been seeing a surge of interest recently as investors look for the next GameStop. American Airlines, BlackBerry and other formerly downtrodden stocks have had extreme swings in price this week.

Reddit: Short Interest and Short Squeeze Defined

And while past performance is not indicative of future results, the blended approach of employing a multitude of investment characteristics helps alleviate a lot of the risk carried when one uses a single factor. Again, short interest has not worked as a consistent strategy in past decades, but it has worked for the last 18 months. If you like short interest and want to make it work, consider using our Top Short Squeeze Stock screen.

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He is also the Founder and Co-Manager of Alpha Picks, a systematic stock recommendation tool designed to help long-term investors create a best-in-class portfolio. At Seeking Alpha, we have developed a screen that marries hard to find short interest data with proprietary quantitative data. The output of the screen is our Very Bullish recommendations that have high levels of short interest. This is an explosive combination and we have found the screen has generated recommendations that have performed very well. In GameStop’s case, activist investor Ryan Cohen promised a corporate overhaul to refocus the retailer on e-commerce and other non-mall-based activities.

The stock split doesn’t change anything for GameStop investors

But they also warned it’s possible to have too much of a good thing. Too-easy trading could encourage people to make too many trades that are too risky for them. Many Redditors have taken these signs that TRKA stock could become the next GameStop. A cheap share price, the retention of Jeffries and the recent short squeeze all seem like a repeat of GME in 2021. Troika’s forward EV/EBITDA ratio sits at 3.1X, a figure usually only seen in private-market transactions.

However, there is a perception that the lower dollar value following a split means that shares are now available to a wider pool of retail investors. As a result, the demand for shares could go up and send prices higher. This is probably the reason why the market got excited following the announcement of GameStop’s stock split. Blending investment metrics based on value, growth, profitability, earnings, and momentum instead of focusing on a single metric like the percentage of short interest is crucial. This balanced approach has worked very well over the long term. As the Head of Quantitative Strategy at Seeking Alpha, I am immersed in data.

The retailer has been trying to reposition its business amid declining sales of physical games and the increasing popularity of digital downloads. That’s not surprising, as the number of physical video game titles available for sale dropped from 321 in 2018 to 226 in 2021. Meanwhile, the number of video game titles distributed digitally was up to 2,182 last year from 1,362 in 2018. The digital distribution channel reportedly accounts for 90% of new console gaming titles, according to technology website Ars Technica. Critics used to dismiss the moonshots for GameStop and others as a sideshow, saying the excess was confined to a few corners of the market. Sharp losses for short sellers may have pushed them to sell some of their other stock holdings to raise cash, and several investors say that contributed to Wednesday’s 2.6% slide for the S&P 500.

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