5 Best Shorts Here: GMCR, CRM, NFLX, LNKD, AMZN

These 5 stocks are in a speculative bubble based on greed and emotion and not based on fact or financial statements. Each of these stocks is overbought, overvalued, overhyped and overowned. Like a stretched rubberband, it’s only a matter of time until the bubble bursts and the prices for each of these names moves markedly lower from here…

GMCR: Sam Amtar who used to run Crazy Eddies the ponzi car wash scam and was busted after cooking the books says that Green Mountain is stir frying up some of their financials, however it’s hard to trust a guy who has already done time for fraud… GMCR has a good deal of receivables, and the stock has made quite a move more than doubling over the past five months. At hedgephone, we like to buy high and sell low so shorting high is certainly something we look to do but always use tight stop loss orders and try not to hold these super-growth shorts overnight if you can afford to pay the brokerage commissions involved in “day hedging” your long portfolio with these names.

CRM is trading at an obscene valuation and the fact the company can’t earn any money and has seen sales growth slow to a trickle compared to expectations. I think CRM is one of the best short ideas in the market currently, but of course the trend toward virualization/digital everything is quite strong. At 330X earnings, however, that strength is well priced into the stock. FFIV, EBIX, VMW, ORCL are good potential “long hedges” for pairs trading CRM from the short side. With the stock well above any rational price that a sane investor would pay for the business, the risk seems quite low for a longer term “short and hold” approach. At hedgephone, we like to short things intraday however, and prefer to open new shorts on spikes in price when the Stochastics are overbought and heading from 85-75 or so with a nice crossover sending the little blue line below the little red line in heavily overbought territory on the daily chart (yeah, highly technical technical analysts are we)…

LNKD: Since barking about a top in Stink-ed-In Linkedin we have pretty much nailed this play, telling readers to short it at $110 — now the stock is trading for a frothy $86 a share or so… Readers should look to short only on overbought spikes in LNKD when the Stochastics are in heavily overbought territory… We still feel the downside is quite significant here, but we also know that the big I banks wan the frothy web bubble to keep inflating for a little while longer so they can gauge fees out of the suckers who buy the Facebook and Twitter IPHOZE…

SQNS is another pump and dump “fraud at this valuation” play for your short watchlist… Cramer is entertaining, but he is also a paid stock promoter, so look out for these pumps…

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