J.C. Penney Company, Inc. (JCP), GameStop Corp. (GME): Billionaires Love These Heavily Shorted Stocks

Page 1 of 2

We have identified five stocks that have at least 30% of their outstanding shares shorted, but are also loved by billionaires. The first is J.C. Penney Company, Inc. (NYSE:JCP), which had 24 notable hedge funds – 13F filers – owning the stock as of 3Q, but still has 33% of its outstanding shares shorted. Sales for Penney are expected to be down in FY2013 on the back of reduced traffic and the absence of coupons.

The retailer also expects to see restructuring charges of $1.19 per share in FY2013, with an expected loss per share of $0.85. Penney still trades well below its peers on a P/S basis at 0.3x, versus Kohl’s at 0.5x and Macy’s at 0.6x. This discount is for good reason, though, as analysts do not expect the business to show signs of recovery until FY2014.

Bill Ackman in front of Perishi

We believe that hedge funds are looking beyond J.C. Penney’s interim pressures to what the company can accomplished after its restructuring. Bill Ackman of Pershing Square owns over 39 million J.C. Penney shares – making up over 10% of his 13F portfolio. Other billionaires backing Ackman by owning shares of Penney include Steve Cohen, Israel Englander and Ken Griffin (check out Bill Ackman’s top picks).

GameStop Corp. (NYSE:GME) has over 35% of its shares shorted, but also had 18 notable investors and hedge funds owning the stock as of 3Q. The game retailer has seen pressure from online competitors, which should help push revenues down 7% in FY2013. The interim decline should continue with lower sales of new game hardware and software. Longer-term, the retailer should see a rebound from a move toward digital sales and mobile games. FY2014 revenues are expected to be up by 3% thanks to expected hardware launches. It appears hedge funds are confident that GameStop can pivot effectively enough to avoid drastic sales declines. Another long-term positive is expected margin expansion due to a shift toward digital downloads, if the company can capitalize on this space. Ken Griffin and Steve Cohen are  both big-name investors owning GameStop (check out Ken Griffin’s newest picks).

RadioShack Corporation (NYSE:RSH) saw 16 notable investors and hedge funds – 13F filers – owning the stock as of 3Q and meanwhile had 36% of its shares shorted. RadioShack is expected to continue store closures in the U.S., while opening locations in Mexico. The one upside for the company is its expected growth in mobile computing, which should help boost sales up 1% in 2013. RadioShack was pushed down almost 80% in 2012 as it continues a product shift toward smartphones. The next big milestone for RadioShack is a renegotiation of its Target kiosk. Cohen upped his stake in RadioShack over 1,000% last quarter (check out Steve Cohen’s biggest bets).

Who’s No. 4 and 5?

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 44 percentage points in 21 months Learn how!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!