Tag: WKHS

Stocks with the Highest Short Interest: Short Squeeze Plays

by Fred Fuld III

As I write this, the Dow Jones Industrial  Average is down 477, and the S&P is also down. Maybe while the market has dropped so much, now might be the time to look for short squeeze opportunities.

Here is a review about the short squeeze and its terminology. When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short selling can be profitable, but sometimes when the stock moves against the short sellers, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

Check out the following list, but be aware, that often some stocks are heavily shorted for a reason. All these stocks have significant short metrics.

Stock Symbol % Float Shorted Days to Cover Stock Price
Workhorse WKHS 35% 2.2 8.97
Arcimoto FUV 34% 5.4 10.94
Blink BLNK 34% 6.2 30.09
Support.com SPRT 33% 1.5 8.31

So as an example, Arcimoto has 34% of the float shorted, and it will takeover five days for the short sellers to cover their positions, based on the average daily volume.

Obviously, there is no guarantee that these stocks will go up, but if I was short any stock, I wouldn’t want to waste any time covering my position if the stock started to move up sharply, before all the other short sellers clamor in and drive the price way up.

Disclosure: Author didn’t own any of the above at the time the article was written

Charge Your Portfolio With These Electric Vehicle Stocks

by Nkem Iregbulem

Over the past few years, electric vehicle sales have rapidly increased around the world. In its 2020 Vehicle Outlook, BloombergNEF predicted that electric vehicle sales could reach 54 million by 2040. Although electric vehicles’ current share of new vehicle sales is modest, BloombergNEF expects this percentage to rise quickly from 2.7% in 2020 to 10% in 2025.  Furthermore, it expects the size of the global electric vehicle fleet to reach 116 million by 2030. These sales would likely be driven by falling battery prices, energy density improvements, and more charging infrastructure. Consumers are drawn to electric cars for many reasons — including but not limited to cheaper maintenance costs, safety improvements, and environmental concerns.

Companies involved in the electric vehicle market may benefit from the growing popularity of electric mobility. Your options include Tesla (TSLA), Nikola Corporation (NKLA), NIO Limited (NIO), Workhorse Group Inc. (WKHS), and Electrameccanica Vehicles Corporation (SOLO). All of these stocks can be found on the NASDAQ exchange except for the NIO stock, which is traded on the New York Stock Exchange.

Your first option is Tesla (TSLA), a well-known sustainable energy company that strives to facilitate the world’s transition to electric mobility. It was founded in 2003 and is headquartered in Palo Alto, California. The company manufactures and sells electric vehicles, battery energy storage, solar panels, and solar roofs. It has released many car models, including the Model S in 2012, Model X in 2015, Model 3 in 2017, and Model Y in 2020. Tesla has a market cap of $187.33 billion and does not pay a dividend. It has a high price-to-sales ratio of 6.77 and a price-to-book ratio of 19.41. The stock trades at 303.03 times forward earnings. Tesla enjoys a 3-year revenue growth rate of 51.99% and a 5-year revenue growth rate of 50.36%.

You might also consider Nikola Corporation (NKLA), a company that designs and manufactures battery-electric and hydrogen-electric vehicles. The company was founded in 2014 and is based in Salt Lake City, Utah. In addition to vehicles, Nikola also designs and manufactures energy storage systems, vehicle components, and hydrogen fueling station infrastructure. The company has a market cap of $23.82 billion and does not pay a dividend.

Founded in 2014 and based in Shanghai, NIO Limited (NIO) designs, manufactures, and sells premium electric autonomous vehicles. The company offers sports cars as well as mid- and full-sized SUVs. Its current models include the EP9, ES6, and ES8. It is also involved in a single-seater racing series for all-electric vehicles known as the Formula E Championship. NIO has a market cap of $8.24 billion and does not pay a dividend. The stock has a high price-to-sales ratio of 6.98 and a price-to-book ratio of 7.00. In its latest quarter, the company faced a negative year-over-year revenue growth rate of -15.89%.

Another competitor in the market is Workhorse Group Inc. (WKHS), a company that designs, develops, manufactures, and sells battery-electric vehicles and aircraft. Its product offerings include cargo vans, pickup trucks, and delivery drone systems. Founded in 2007 and headquartered in Loveland, Ohio, Workhorse Group has a market cap of $1.03 billion and does not pay a dividend. Its stock has a very high price-to-sales ratio of 7,315.62, putting itself well into the overpriced category. It also has a price-to-book ratio of 27.48 and faces a negative 3-year revenue growth rate of -61.14% but a better 5-year revenue growth rate of 16.23%.

Finally, you might also consider Electrameccanica Vehicles Corp (SOLO), a company that designs and manufactures electric vehicles. Its product line includes the SOLO model, an all-electric single-passenger vehicle, and the Tofino, a two-seater electric sports car. In addition to electric vehicles, the company also offers custom build vehicles — generating maximum revenue from this particular segment. Electrameccanica was founded in 2015 and is based in Vancouver, Canada. It has a market cap of $161.2 million and does not pay a dividend. The company’s stock has a very high price-to-sales ratio of 163.87 and a price-to-book ratio of 11.45. In its latest quarter, Electrameccanica Vehicles enjoyed a year-over-year revenue growth rate of 15.20%.

Maybe one of these stocks will put a spark in your portfolio.

Disclosure: Author did not own any of the above stocks at the time the article was written.