J.C. Penney Company, Inc. (JCP), Questcor Pharmaceuticals Inc (QCOR), Spectrum Pharmaceuticals, Inc. (SPPI): Are Shorts Finally Leaving These Stocks?

Final Thoughts

In my book, Taking Charge With Value Investing (McGraw-Hill, 2013), I present changing sentiment as one of the primary trends to watch and that investors seem to ignore. Investors tend to miss buying stocks at value-presenting prices but then change their outlook as a stock ticks considerably higher from its lower levels.

Just look at Groupon Inc (NASDAQ:GRPN): much of its gains have been due to short covering, and just eight months ago there were many who expected bankruptcy as a likely outcome. Now the stock trades at 52-week highs, and aside from new leadership not that much has changed, with the exception of sentiment.

With that said, it is important not to become an investor who allows the price of a stock to dictate your outlook on a company. You need to look for the signs of changing sentiment first, and then assess whether a risk is worth a reward. In the case of these five stocks, each are without question seeing less pressure from shorts, which could be an indication of changing sentiment.

The article Are Shorts Finally Leaving These Stocks? originally appeared on Fool.com.

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