Eight Financial Plays the Market Hates but Analysts Love

Jacob Harper |

The market and the expert often have slight disagreements as to the strength of individual securities. It’s really up to every individual investor to choose who they want to believe – the pros or the wisdom of the crowd on the merits of a stock.

But with some plays, the experts and the investors don’t just have differing opinions on a play: they are diametrically opposed. This is perhaps best illustrated in stocks that have two key factors:

1)      The stock carries a short float over 20 percent

If a stock is being shorted heavily, it means investors are betting the stock is going to fall in price. A float short over 20 percent is unusually high, and indicates vast swaths of traders are bearish on the stock.

2)      The analyst consensus on the stock is at least “buy.”

This means that when all expert opinion on the stock is calculated, the majority of analysts either recommends or strongly recommends buying the stock – in spite of the float short.

When we applied these two pieces of criteria to the market, we found eight financial stocks that are currently being both shorted by a lot of investors yet still retain high marks from analysts:

AmTrust Financial Services (AFSI)

Market Cap: $2.05 billion

Price: $34.69

P/E Ratio: 9.52

Float Short:  30.56 percent

Encore Capital Group (ECPG)

Market Cap: $1.26 billion

Price:  $49.22

P/E Ratio: 17.36

Float Short:  22.49 percent

National Bank Holding Corp. (NBHC)

Market Cap: $1.08 billion

Price: $21.18

P/E Ratio: 123.94

Float Short:  26.69

PacWest Bancorp (PACW)

Market Cap: $1.83 billion

Price: $41.35

P/E Ratio: 26.87

Float Short:  29.57 percent

PHH Corporation (PHH)

Market Cap: $1.40 billion

Price: $24.70

P/E Ratio: 11.29

Float Short:  30.66 percent

Radian Group Inc. (RDN)

Market Cap: $2.42 billion

Price: $13.95

P/E Ratio: N/A

Float Short:  28.95 percent

Umpqua Holdings Corporation (UMPQ)

Market Cap: $2.09 billion

Price: $18.86

P/E Ratio: 21.03

Float Short:  21.06 percent

World Acceptance Corp. (WRLD)

Market Cap: $1.02 billion

Price: $86.43

P/E Ratio: 9.64

Float Short:  34.40 percent

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Symbol Name Price Change % Volume
AFSI AmTrust Financial Services Inc. 26.41 -0.87 -3.19 478,320
BRESF Blackthorn Resources Ltd n/a n/a n/a 0
ECPG Encore Capital Group Inc 20.35 -0.30 -1.45 318,930
NBHC National Bank Holdings Corporation 22.99 -0.10 -0.43 51,311
PACW PacWest Bancorp 41.87 0.01 0.02 818,972
PHH PHH Corp 15.43 0.12 0.78 137,515
RDN Radian Group Inc. 14.49 -0.05 -0.34 710,046
UMPQ Umpqua Holdings Corporation 15.48 0.05 0.29 1,594,648
WRLD World Acceptance Corporation 50.40 -0.56 -1.10 38,682


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