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7 of the Most Loathed Stocks in the Market

By U.S. News & World Report

These stocks are unloved and unwanted.

Most people make money on Wall Street by buying stocks, holding them for a bit, and selling them at a higher price. You can also do the opposite: Borrow and immediately sell a stock, then wait to buy it back at a lower price, and pocket the difference. That’s what it means to short a stock, and some investment professionals on Wall Street are quite fond of the practice. Not only do shorts help keep the bulls grounded in reality, they can serve as a warning sign when they converge upon one stock. What follows are seven of the most loathed stocks in the market, as measured by short interest.

Coty (ticker: COTY)

Beauty product-maker Coty ironically is a stock that’s considered rather unsightly by much of Wall Street: It’s the single-most shorted stock in the entire market. More than 54 percent of its float — or the number of outstanding shares once you subtract the number of closely held shares — is sold short. Despite several major, positive changes on the horizon — COTY is joining the Standard & Poor’s 500 index and will soon acquire more than 40 of Procter & Gamble’s (PG) beauty brands in a $12.5 billion deal — investors aren’t swayed. COTY has posted three consecutive years of falling revenue and trades at 50 times earnings, so some pessimism is understandable.

Vivint Solar (VSLR)

Solar energy is certainly a popular thing to hate on Wall Street right now, and for good reason: Many U.S. solar companies, like Vivint itself, are wildly unprofitable. In fiscal 2015, VSLR posted revenue of $64.2 million to go with an operating loss of $231.1 million. The capital-intensive solar installation business also saw cash reserves dwindle from $261.6 million in 2014 to $92.2 million in 2015, as long-term debt ballooned from $105 million to more than $415 million. With the company months removed from a CEO transition and rival SolarCity (SCTY) needing a corporate bailout from Tesla (TSLA) to survive, it’s no wonder nearly half of Vivint’s float is sold short.

Fitbit (FIT)

More than 52 million shares of Fitbit were spoken for by short sellers, September data show, equating to roughly 40 percent of the wearable fitness tracking company’s float. Next to companies like Coty and Vivint Solar, Fitbit’s inclusion on this list is a bit confusing: Fitbit is a fast-growing, profitable company that’s beaten both revenue and earnings estimates in all six of its quarters as a public company. FIT stock’s recent downgrade to “underweight” at the hands of Pacific Crest, citing a poor beginning to the holiday sales season, certainly won’t help sentiment, and shares of Fitbit plunged 10 percent on the day of the news.

Shake Shack (SHAK)

SHAK stock has looked bloated ever since its Wall Street debut in 2015. Long-term charts might fool one into believing a price in the $30s is a steal, especially after SHAK nearly reached $100 per share in mid-2015. But even after a brutal pullback, shares of the high-quality burger chain go for 60 times forward earnings — an insane multiple that’s more typically fetched by software firms than fast-casual joints. More than 7 million Shake Shack shares — or 38 percent of the float — were being shorted in September, making it one of the least popular stocks on the market. SHAK shares are getting grilled in 2016, losing some 14 percent to date.

Wayfair (W)

Wayfair is an up-and-comer in the online home furnishing retail market. Characterized by an easy-to-use interface and aggressive marketing techniques to retain and sell to existing customers, Wayfair is growing by leaps and bounds. In 2015, revenue surged 70 percent from the previous year, and sales are expected to jump another 52 percent this year. That said, the reason Wayfair stock is one of the most shorted on Wall Street is its consistent unprofitability — the company has never made money. Down the road, Wayfair should be able to lower its customer acquisition costs and build loyal, repeat customers, which ideally helps it turn profitable. Thirty-seven percent of the float is sold short.

Axovant Sciences (AXON)

It makes sense that this small-cap biotech might attract some skeptical investors — Axovant was taken public in 2015 by a 29-year-old hedge funder with no prior industry experience. The company doesn’t have any approved drugs on the market yet, and its lead product candidate is a Phase III Alzheimer’s drug, the rights to which it bought from GlaxoSmithKline (GSK) in 2014 for $5 million and future royalties. A bet on AXON is by default a bet against the expertise of GlaxoSmithKline, a $100 billion pharmaceutical company with more than 80 years of experience. Nearly 8.7 million shares of AXON are sold short, 28 times the stock’s average daily trading volume.

Lumber Liquidators (LL)

Hardwood flooring retailer Lumber Liquidators still hasn’t recovered from the 2015 “60 Minutes” segment that raised concerns over high levels of formaldehyde in certain China-made flooring that the company sold. Better-than-expected rulings from the Centers for Disease Control and Prevention and the U.S. Consumer Product Safety Commission are both net positives, but there’s still a multidistrict litigation, or combination of lawsuits, hanging over LL’s head. That legal uncertainty, combined with the fact that comparable store sales growth has been negative for 10 consecutive quarters, gives short sellers ample reason to sell 35.5 percent of the float short.

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7 of the Most Loathed Stocks in the Market originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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