Here at Equities.com we take a keen interest in the disparity between what the market experts think will happen with plays, and what is actually playing out. The gulf between the analysts and the retail investors is perhaps most pronounced in the financial sector, where opaqueness can lead the two groups to take diametrically opposed positions on plays, with large groups playing long and short against each other.
As we wind down 2013 we thought it would be interesting to look to see what plays were currently splitting the investment community. That is, what financial stocks maintained high marks from analysts, yet were courting bets against them at exceedingly high rates?
To find these plays, we looked for financial stocks that could answer “yes” to the following questions:
1) Does the stock currently have a short float of 25 percent or higher?
Plays where over 25 percent of shares are being “shorted” (or bet to fall) can definitely be considered to have an unusually high amount of investors betting against them.
2) Does the stock currently have an analyst consensus rating of “buy” or better?
There are plenty of stocks out there that both the market and experts agree are no good. There are many that the market is actively shorting, but consensus still leans away from recommending investment. A consensus of “buy” or stringer indicates the majority of firms still believe the stoc will defy the shorters and rise in value.
Incredibly, out of all the financial sector stocks currently trading on NASDAQ or the NYSE we only found five stocks that could answer “yes” top both questions. They are:
AmTrust Financial Services, Inc. (AFSI)
Market-Cap: $3.05 billion
Performance YTD: +59.21
Short Float Percentage: 29.06
PacWest Bancorp (PACW)
Market-Cap: $1.87 billion
Performance YTD: +75.53
Short Float Percentage: 27.92
PHH Corporation (PHH)
Market-Cap: $1.34 billion
Performance YTD: +2.64
Short Float Percentage: 31.20
Radian Group Inc. (RDN)
Market-Cap: $2.49 billion
Performance YTD: +137.70
Short Float Percentage: 27.06
World Acceptance Corp. (WRLD)
Market-Cap: $1.08 billion
Performance YTD: +20.45
Short Float Percentage: 30.11
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