10 Worst ADR Stocks To Buy According to Short Sellers

7. Despegar.com (NYSE:DESP)  

Short Interest as % of Shares Outstanding: 15.63%

Number of Hedge Fund Investors in Q2 2024: 24

Despegar.com (NYSE:DESP) online travel platform that operates in 19 countries in the Latin America region. The company operates through two primary segments: Air, which focuses on selling airline tickets, and Packages, Hotels, and Other Travel Products, which encompasses travel bundles, cruise tickets, and related offerings.

On August 15, Despegar.com (NYSE:DESP) entered a strategic alliance with World2Meet, the travel division of Spain’s Iberostar Group. As part of the agreement, World2Meet has acquired Despegar.com’s (NYSE:DESP) Destination Management Company (DMC), BDExperience. World2Meet will now be the preferred partner for destination services in Mexico and the Dominican Republic. This move allows the company to focus more on its core business and strengthen its growth strategy. Additionally, the company’s strategic emphasis on high-margin package sales and non-air revenue streams is expected to help the company navigate a challenging economic environment caused by the devaluation of currencies in the Latin America region.

Analysts forecast an improvement in gross margins, driven by cost reductions and the increased use of AI technology. Stronger cash flow is anticipated in the second half of 2024. While 15.63% of the company’s shares are shorted, 24 hedge funds have maintained a bullish sentiment on the stock as of the second quarter with stakes worth $228.82 million. No Street Capital is the largest shareholder in the company, holding $38.36 million worth of stock as of June 30. Industry analysts maintain a consensus Buy rating, with an average price target of $17.50, representing a 31.86% upside potential from its current levels.