A little stock experiment

I was intrigued by an article in The Globe and Mail, carrying the article “Beat the market in 2013 with 5 of Wall Street’s most-hated stocks”

The gist of their article is that if you bought heavily shorted large and mid-cap stocks, you would have beat the S&P 500 by 9.28% each and every year. Market cap matters a lot, because with with the smaller names, negative returns were delivered.

Interesting.

Well, I went to over to the Square Mile Data website, where they handily display the 20 most shorted stocks on the exchange.

I broke the 20 down into market indices, and I recorded their 6 month relative strength.

The top performing share on a relative strength of 6 months, which also happened to to be in FTSE, is HOME (Homebase). It has a Piotroski score of 5.

Not quite with such a large amount of shorting, and a lesser RS6 of 21%, but with a higher Piotroski score of 7, id SMWH (WH Smith). An interesting stock, because if I recall, they’ve got some kind of turnaround going on there.

Very very interesting is HMV, which has a tiny market cap of £7.5m, a Piotroski score of 3, an RS6m of -54.7%, and fails to make it into an index. This should make it an interesting short candidate. Given the outlook for the company, it might be a good candidate, too.

Anyway, something to check up on in 6 months time. I have the warm tinglies about this one, but no positions. I think this will work! Let’s see, shall we?

HOME 128.3p
HMV 1.74p (short candidate)
SMWH 677.8p
ASX 3118
My ref: DB03/186

Advertisements

About mcturra2000

Computer programmer living in Scotland.
This entry was posted in Uncategorized. Bookmark the permalink.

3 Responses to A little stock experiment

  1. Jeffrey Lam says:

    Interesting that SMWH features, given that 1) I hold 2) my recent FTSE 250 trawl and shortlisting for the NFSC 2013 brought this up!

  2. CantEatValue says:

    One winner in this already! Bye bye HMV

  3. Ollman says:

    Thanks for the link to squaremiledata – very handy – I did not know that existed..

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s