Four Stocks Attracting Short Interest: GRPN, RATE, ESRX, CBST

April 09, 2012, 10:28 am ET, BY Billy- Contributor| Editor: Thomas H. Kee Jr. (Follow on LinkedIn)

Our Trading Reports in this Article:

• GRPN
• RATE
• ESRX
• CBST

After a monumental run-up in equity prices during Q1, it stands to reason that some short-sellers are taking aim at stocks that they believe have gotten ahead of themselves. Other short-sellers have been honing in on companies that have come upon hard times or may have perceived risk lying around the corner. Here are four stocks that have been gaining traction among traders taking on short positions in their portfolios.

Cost Conscious

At last check, Groupon (Nasdaq: GRPN) had a short ratio of 11.1 indicating a bearish sentiment towards the Internet marketing company. The stock has already taken a pounding this year. Its share price is down 31.3% since the beginning of the year.

The company is coming off of a rough week after it came to light that the SEC is considering an investigation of Groupon after the company said it would have to revise its Q4 results due to a failure to allocate an adequate reserve for customer refunds. The short interest is unlikely to dissipate until Groupon is able to instill confidence in investors regarding the reliability of its financial statements.

Bankrate (Nasdaq: RATE) is presenting looking at a short ratio of 15.1 and a short percentage of float of 26.3%. The stock was pushed 4.4% lower on Thursday as the markets came to a close for the week. Analysts are still expecting the company to post a 27.5% pop in total revenue for the year. Meeting or beating these projections could have short-sellers heading for the exits.

Doctor’s Orders

There have been plenty of naysayers betting against the success of the merger of Express Scripts (Nasdaq: ESRX) and Medco Health Solutions. Although it does not look to be a probable outcome, pharmacy trade groups have filed suit in an attempt to prevent the deal from going forward.

Express Scripts has a short ratio of 11.0 and a short percentage of float of 20.1%. Shorts have gotten torched so far this year though as the stock has run-up 27.4%.

One other stock that has been attracting short-selling in the health care space is Cubist Pharmaceuticals (Nasdaq: CBST). The company’s stock has a short ratio of 15.6 and a short percentage of float of 29.3%. Cubist is still positioned for healthy EPS and revenue growth this year according to analysts’ estimates. Shares of CBST have surged 42.3% over the course of the last year.

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