20 Underperforming Stocks Targeted By Short Sellers

8. Jack in the Box Inc. (NASDAQ:JACK)

Short interest: 17.09%

6 months’ performance: -51.48%

Jack in the Box Inc. is a franchisor and operator of quick-service restaurants. The company operates restaurants under the Del Taco and Jack in the Box brands. Its stock has lost half its value in the last six months, but a case could be made that the negatives are now well priced in.

The company is highly leveraged, which is why investors are betting against a turnaround. However, the debt has a long-term maturity, and the company is doing a good job of increasing its cash reserves while keeping debt stable.

JACK is also focusing on its franchise business to increase royalties and ensure stable cash flows. It is the Del Taco chain that is causing headaches, but the management has a different type of solution for this problem. A restructuring could be on the cards, and a complete divestiture of the business isn’t being ruled out either. The firm could generate $200 million with a possible sale, which is a far cry from the $585 million it paid to take the business private in 2022.