14 Worst 52-Week High Stocks to Buy According to Short Sellers

9. SL Green Realty Corp. (NYSE:SLG)

52 Week Range: $28.55 – $73.80

Current Share Price: $72.04

Short % of Shares Outstanding: 15.15%

Number of Hedge Funds holding stakes as of Q2 2024: 20

SL Green Realty Corp. (NYSE:SLG) is a real estate company and the largest office landlord in Manhattan. It operates as a fully integrated real estate investment trust focused on acquiring and managing commercial properties.

While the stock is trading near its all-time highs, a short interest of 15.15% underscores growing pessimism about the company’s prospects. The high short interest is one of the reasons it remains one of the worst 52-week high stocks to buy, according to short sellers.

Stiff competition from industry peers is one of the reasons short sellers remain pessimistic about SL Green Realty Corp. (NYSE:SLG)’s long-term prospects, as it could restrict the firm’s capacity to keep its tenants, as the higher rents could reduce its control over pricing. The increased availability of office spaces is expected to intensify competition and negatively affect SL Green’s capacity to replace tenants who leave or fill empty spaces, leading to a drop in occupancy in the short term.

Moreover, in an environment of high interest rates, SL Green Realty Corp. (NYSE:SLG) might struggle to acquire or develop properties using loans due to the expected higher costs.

Nevertheless, SLG is experiencing strong interest in leasing its properties as tenants’ demand for high-quality office spaces keeps increasing. Given that the demand for office spaces in the near future is expected to be fueled by a need to spread out to accommodate more square feet per employee, SLG is well-equipped to handle the challenging market conditions.

Furthermore, this real estate investment trust (REIT) benefits from a varied group of tenants, including long-term agreements and a solid financial background. This reduces the risk of relying too heavily on a single industry and provides a steady stream of rental income for the company.

During this year’s second quarter, 20 out of the 912 hedge funds surveyed by Insider Monkey were SL Green Realty Corp. (NYSE:SLG) shareholders. Anand Parekh’s Alyeska Investment Group was the largest investor since it owned 1.64 million shares worth $92.77 million.