In this article, we discuss the 14 worst 52-week high stocks to buy according to short sellers.
The start of the US Federal Reserve cutting cycle ushers a new era in the investment world after one of the longest bull runs. Major US Indices are at record highs, well supported by an economy that has shrugged off the adverse effects of high interest rates. A resilient economy has been the catalyst behind companies delivering better-than-expected results, helping shore up sentiments in the equity markets. With the S&P 500 at record highs, so are stocks trading close to 52-week highs on valuations that are getting out of hand.
READ ALSO: 12 Best Forever Stocks To Buy Now and 12 Best Long-Term Stocks to Buy According To Warren Buffett.
The first interest rate cut comes amid growing concern about a slowing US economy depicted by weakness in the labor market, slowing manufacturing, and weak consumer purchasing power. The impact of high interest rates for a long time is already being felt on consumer purchasing power taking a hit to the detriment of small and medium businesses.
Likewise, Ray Dalio the founder of Bridgewater Associates believes the Fed faces a tough balancing act as it commences the cutting cycle. In an interview with CNBC, Dalio reiterated that the Fed must find a way to keep interest rates high to prevent inflation edging higher and keeping them low enough to offer support to an economy that is facing an enormous amount of debt.
While there were fears that a steeper interest rate cut could be the worst outcome for stocks on fueling concerns about the economy’s health; that has not been the case. The upward momentum in the equity markets appears to have gathered steam depicted by the S&P 500 at all time highs after the cut.
Disappointing economic data in recent months has been the catalyst behind BTIG analyst Jonathan Krinsky reiterating that the risk-reward in the near term is now skewed to the downside regardless of what the Federal Reserve does. The sentiments come amid concerns that the Fed might have waited too long before cutting.
According to Krinsky, consumer staple stocks remain the most susceptible to significant downside risk. That’s because it is one of the sectors that has felt the full brunt of high interest rates taking a toll on consumer purchasing power.
On the other hand, the real estate sector, especially home-building stocks, could be big winners on the Fed cutting by 50 basis points. In the three months leading up to the rate cut cycle, homebuilders stocks outperformed the S&P 500, and building materials have also seen success. Over the last quarter, shares of homebuilders have risen by 26%, while building materials have seen a 13% increase, in contrast to the S&P 500, which has only gone up by 2%.
Shaniel Ramjee, who co-leads the multi-asset division at Pictet Asset Management’s London branch, mentioned that his group has been purchasing shares of U.S. financial firms in the past few weeks in preparation for expected interest rate reductions.
The analyst is confident that the financial sector will gain from a steepening yield curve due to increased support from lower interest rates for consumers and greater economic activity when interest rates are reduced.
Stocks trading near the 52-week highs could face pressure as valuation scrutiny gathers momentum. Uncertainty over the upcoming US presidential election could also weigh significantly on overvalued stocks trading close to their 52-week highs. Consequently, now could be the best time to pay attention to stocks that are trading near their 52-week highs and are moderately shorted.
Source: Pexels
Our Methodology
We used the Finviz stock screener to scan for companies that are trading near their 52-week highs and have high short interest. We identified 25 stocks that fit our criteria and then picked the 14 that were the most popular among elite hedge funds. The stocks are ranked in ascending order, based on their short interest.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
14 Worst 52-Week High Stocks to Buy According to Short Sellers
14. Tecnoglass Inc. (NYSE:TGLS)
52 Week Range: $28.21 – $68.95
Current Share Price: $66.99
Short % of Shares Outstanding: 7.59%
Number of Hedge Funds holding stakes as of Q2 2024: 16
Tecnoglass Inc. (NYSE:TGLS) is a basic materials company that manufactures, supplies, and installs architectural glass, windows, and associated aluminum and vinyl products for commercial and residential construction markets. It provides low emissivity, laminated/thermo-laminated, thermo-acoustic, tempered, silk-screened, curved, and digital print glass products.
Tecnoglass Inc. (NYSE:TGLS) has declared a quarterly dividend of $0.11 per share for the third quarter of 2024, demonstrating the firm’s commitment to return value to shareholders backed by a solid balance sheet. The firm has also disclosed its highest single-family residential revenues of $95.7 million and overall income of $219.7 million during the second quarter of 2024.
The firm anticipates full-year earnings to range from $860 million to $910 million, marking a 6% growth rate in organic terms at the middle of the range. These recent achievements underscore Tecnoglass Inc. (NYSE:TGLS) ‘s economic stability and potential for expansion.
Nevertheless, upward momentum on growth depends on interest rates coming down. The high interest rate environment has been a big headwind affecting consumer purchasing power, therefore raising serious concerns about the company’s long-term prospects.
High mortgage rates attributed to the high interest rates also hinder the possibility of many houses going on sale or being quite expensive. With the stock trading near its all-time highs amid key headwinds of high interest and mortgage rates, short interest rates stand at 7.59%.
Tecnoglass Inc. (NYSE:TGLS) was part of 16 hedge funds’ portfolios in the second quarter of 2024, down from 18 in the previous quarter. As of June 30, 2024, Owls Nest Partners is the top shareholder in the company and has a position worth $38.96 million.
13. VIZIO Holding Corp. (NYSE:VZIO)
52 Week Range: $4.82 – $11.30
Current Share Price: $11.20
Short % of Shares Outstanding: 10.68%
Number of Hedge Funds holding stakes as of Q2 2024: 23
VIZIO Holding Corp. (NYSE:VZIO) is a technology company that provides smart televisions, sound bars, and accessories. Famous for its range of consumer electronics, especially TVs and sound systems, it is based in Irvine, California. The firm is known for providing top-notch items that appeal to a wide range of customers, a goal that has been a priority under Wang’s guidance.
While the stock has powered to 52-week highs, it is in dire need of a catalyst if the upward momentum is to persist. VIZIO Holding Corp. (NYSE:VZIO) has always been the largest TV brand sold in the giant retail store. It has also occupied the second spot as the largest seller of flat-screen TV screens in the US. The Walmart deal amounted to $11.50 a share.
Additionally, the company has delivered disappointing results that do not align with the stock trading near the 52-week high to justify further buys. Consequently, the short interest on the stock has remained at a high of 10.68%.
Nevertheless, the company delivered solid second-quarter results as it bounced back to profitability after the Q1 2024 slowdown. Revenue in the quarter was up 11% year over year to $437.3 million, as gross profit increased 16% to $99.5 million. Nevertheless, the company’s profitability dropped to $0.2 million compared to the $1.9 million delivered last year in the same quarter.
With profitability increasingly becoming a problem, VIZIO Holding Corp. (NYSE:VZIO) is one of the worst 52-week high stocks to buy, according to short sellers, while trading at a premium with a price-to-earnings multiple of 70.
As per Insider Monkey’s second-quarter database, 23 hedge funds were bullish on VIZIO Holding Corp. (NYSE:VZIO), an increase from 22 funds in the preceding quarter. Matthew Halbower’s Pentwater Capital Management held the largest position in the company, with 6.80 million shares worth $73.44 million.
12. Rocket Lab USA, Inc. (NASDAQ:RKLB)
52 Week Range: $3.47 – $7.53
Current Share Price: $7.12
Short % of Shares Outstanding: 11.47%
Number of Hedge Funds holding stakes as of Q2 2024:15
Rocket Lab USA, Inc. (NASDAQ:RKLB) is an aerospace company specializing in space operations and solutions for the aerospace and defense sectors. It offers launch support and solutions for space and defense markets. The firm offers launch support, spacecraft design services, parts, and production.
The stock has been flying high in response to better-than-expected second-quarter results. The company posted record quarterly revenues as it also narrowed its second-quarter loss. Revenue in the quarter was up by 71% to $106.3 million as net loss narrowed to $41.6 million from $45.9 million delivered a year ago.
Revenue growth in the quarter was a testament to growing demand for Rocket Lab USA, Inc. (NASDAQ:RKLB) launches service and space systems products. Additionally, the company is projecting third-quarter revenue of between $100 million and $105 million.
Amid the better-than-expected financial results, short sellers remain pessimistic about Rocket Lab USA, Inc. (NASDAQ:RKLB)’s long-term prospects even as it trades near its 52-week high. Short interest on the stock remains at a high of 11.47%.
The high short interest, which affirms why it is one of the worst 52-week high stocks to buy according to short sellers, has to do with growing concerns about the company’s long-term prospects. Despite analysts at Morgan Stanley maintaining a positive view of the firm’s future in the growing space sector, which encompasses launch services, satellite technology, and the design and production of components, the company recognizes the difficulties in speeding up the Development of new rockets.
Morgan Stanley’s outlook indicates that Rocket Lab’s success will mainly hinge on the firm’s ability to execute and the competitive environment within the space industry. In the second quarter, 15 hedge funds had stakes in Rocket Lab USA, Inc. (NASDAQ:RKLB).
11. Revolve Group, Inc. (NYSE:RVLV)
52 Week Range: $12.25 – $25.95
Current Share Price: $25.17
Short % of Shares Outstanding: 13.27%
Number of Hedge Funds holding stakes as of Q2 2024: 17
Revolve Group, Inc. (NYSE:RVLV) is a consumer cyclical company that operates as an online fashion retailer for millennial and Generation Z consumers. It offers apparel, footwear, accessories, beauty, and home products from emerging, established, and owned brands.
After years of disappointing results, the online retailer stock has bounced back to life. The stock is trading near 52-week highs, waiting to see if it has what it takes to continue edging higher.
Revolve Group, Inc. (NYSE:RVLV) bounced back into growth in Q2 2024 after experiencing a five-quarter stretch of falling revenues, albeit with a relatively small increase. Revenues were up by 3% to $282.5 million, beating estimates of $277.2 million. The Revolve division saw a modest increase of 4% to $245.5 million, whereas its premium brand, forward, saw a slight drop of 4% to $36.9 million. International sales were a notable success, rising by 13% to $57.4 million.
The company maintained its strong gross profit margins at 54%, demonstrating the robustness of its business strategy, and managed to reduce its operational costs by decreasing its marketing budget. This led to a significant increase in operating profit, rising from $7.4 million to $16.4 million.
Revolve Group, Inc. (NYSE:RVLV)’s core business depends on the economy’s health. The Fed maintaining high interest rates threatens to hurt consumer purchasing power, which could affect the company’s ability to generate sales. Additionally, the company’s sales on the international scene could be under pressure due to a deteriorating global economy.
According to Insider Monkey’s Q2 data, 17 hedge funds were long Revolve Group, Inc. (NYSE:RVLV), compared to 13 funds in the prior quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is a prominent position holder in the company, with 478,623 shares worth $7.61 million.
Here is what Polen Capital specifically said about Revolve Group, Inc. (NYSE:RVLV) in its Q2 2024 investor letter:
“Revolve Group, Inc. (NYSE:RVLV) is an online fashion retailer targeting Gen Z women. The stock was one of our top performers early in the year but has retrenched over the past quarter largely due to increasing “risk-off” flight-to-safety market dynamics. Notably, the business fundamentals have inflected positively this year, leading us to believe that shifting market sentiment has an outsized impact on the stock price. Revolve Group is more economically sensitive over the near term as a consumer discretionary company, but earnings have bottomed after two tough years, and we continue to view Revolve as well-positioned to grow earnings at an accelerating rate over the near term, while the long-term outlook is intact.”
10. MannKind Corporation (NASDAQ:MNKD)
52 Week Range: $3.17 – $6.81
Current Share Price: $6.66
Short % of Shares Outstanding: 14.98%
Number of Hedge Funds holding stakes as of Q2 2024: 20
MannKind Corporation (NASDAQ:MNKD) is a biopharmaceutical company that develops and commercializes inhaled therapeutic products for endocrine and orphan lung diseases. It offers Afrezza, an inhaled insulin used to improve glycemic control in adults with diabetes. The company’s product pipeline also includes Tyvaso DPI (Treprostinil) for treating pulmonary arterial hypertension and pulmonary hypertension.
MannKind Corporation (NASDAQ:MNKD) delivered its highest quarterly revenues of $72 million in Q2, propelled by its leading products, Tabesa DPI and Afrezza. However, it plunged to a net loss of $2 million, attributed to early repayment of debts.
Analysts at Cantor Fitzgerald and RBC Capital remain bullish about MannKind Corporation (NASDAQ:MNKD)’s long-term prospects, which are backed by a robust pipeline that should sustain revenue growth. However, higher-than-expected interest expenses and underperformance in the diabetes business continue to send jitters in the investment community, depicted by the high short interest rate of 14.98%.
Additionally, dependence on upcoming clinical trials also adds a layer of inherent risk that underscores why it could be one of the worst 52-week high stocks to buy, according to short sellers. Additionally, the stock trades at a premium with a price-to-earnings multiple of 36 while not rewarding investors with dividends.
According to Insider Monkey’s second-quarter database, MannKind Corporation (NASDAQ:MNKD) was part of 20 hedge fund portfolios, compared to 19 funds in the prior quarter. Seth Rosen’s Nitorum Capital is the leading stakeholder of the company, with 10.08 million shares worth $52.62 million.
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.
8. The Bancorp, Inc. (NASDAQ:TBBK)
52 Week Range: $29.92 – $54.44
Current Share Price: $52.50
Short % of Shares Outstanding: 15.31%
Number of Hedge Funds holding stakes as of Q2 2024: 19
The Bancorp, Inc. (NASDAQ:TBBK) is a financial services company that operates as a bank holding company. It offers a range of deposit products and services that include checking, savings, time, money market, and commercial accounts; overdrafts; and certificates of deposit.
The Bancorp, Inc. (NASDAQ:TBBK)’s core business tends to do well in a high-interest-rate environment as it can generate more interest income from loans. The company has been recording booming business over the past year.
The Bancorp, Inc. (NASDAQ:TBBK) delivered mixed second-quarter results, with revenues coming in at $124.52 million, below consensus estimates of $127.45 million. While earnings per share increased to $1.07 a share, above the $0.89 delivered last year, it missed estimates of $1.07 a share.
While trading at a price-to-earnings multiple of 13, The Bancorp, Inc. (NASDAQ:TBBK) does not reward investors with dividends, let alone buybacks, crucial to returning value to shareholders. Consequently, investors remain skeptical about its ability to generate long-term value.
According to Insider Monkey’s third-quarter database, 19 hedge funds were bullish on The Bancorp, Inc. (NASDAQ:TBBK), compared to 22 funds in the preceding quarter. D. E. Shaw’s D E Shaw is the company’s largest stakeholder, with 411,936 shares valued at $15.55 million.
7. Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY)
52 Week Range: $18.61 – $39.73
Current Share Price: $38.34
Short % of Shares Outstanding: 15.40%
Number of Hedge Funds holding stakes as of Q2 2024: 25
Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY) is a biopharmaceutical company that develops and commercializes therapies for patients with rare and neurological diseases. The company has made significant progress in its intensive pitolisant program, focusing on unmet medical needs within the narcolepsy patient population.
The firm has obtained regulatory clearance from the FDA for WAKIX in treating narcolepsy in children and is set to submit an NDA for idiopathic hypersomnia towards the end of the year. These developments represent recent milestones in Harmony Biosciences’ commercial activities.
Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY) announced a notable 29% rise in its product WAKIX’s net sales, reaching $172.8 million in the second quarter of 2024. The firm also delivered a net income of $60.6 million for the same period, showing a stable financial status with $434.1 million in cash, cash equivalents, and investments. Harmony Biosciences is moving towards achieving its 2024 net revenue target of $700 million to $720 million.
While the high short interest underscores why it is one of the worst 52-week high stocks to buy, according to short sellers, the fact that the company’s revenues are highly dependent on one approved product, Wakix, has always been a big concern.
While Wakix attained FDA approval in 2019, it is poised to face a tough time once it loses its exclusivity. The loss of exclusivity could significantly take a toll on the company’s revenue streams, consequently affecting the company’s revenue base. While the company is profitable, its dependence on one approved drug raises concerns about its ability to generate long-term value.
According to Insider Monkey’s second-quarter database, 25 hedge funds were long Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY), compared to 24 funds in the prior quarter. Vivo Capital is the leading stakeholder of the company, with 2.61 million shares worth over $78.63 million.
6. Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM)
52 Week Range: $20.97 – $54.88
Current Share Price: $53.64
Short % of Shares Outstanding: 15.77%
Number of Hedge Funds holding stakes as of Q2 2024: 27
Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) is a commercial-stage biopharmaceutical company focusing on rare neuroendocrine diseases. Its lead product candidate is IMCIVREE for the treatment of pro-opiomelanocortin.
The developer of therapies for rare genetic disorders has seen its sentiments in the market receive a significant boost in response to strategic initiatives and growth potential. Investors have been upbeat about the company’s prospects, especially on sales of the lead product, increasing 79% to $77 million in the year’s first half.
Moreover, Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) has broadened its research and development efforts by starting Phase 2 studies for two fresh MC4R agonists. The firm’s second-quarter results were robust. Nevertheless, the company posting a quarterly loss of $0.55 a share versus expected earnings of $0.70 a share underscores why it remains one of the worst 52-week high stocks to buy, according to short sellers.
The premium valuation is one of the reasons short sellers remain skeptical about the stock edging higher from current levels. Consequently, the stock’s short interest remains at a high of 15.77%. According to Insider Monkey’s database, 27 hedge funds held stakes in Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) in Q2 2024, compared to 30 funds in the prior quarter.
5. Brinker International, Inc. (NYSE:EAT)
52 Week Range: $28.23 – $76.90
Current Share Price: $74.08
Short % of Shares Outstanding: 16.21%
Number of Hedge Funds holding stakes as of Q2 2024: 33
Brinker International, Inc. (NYSE:EAT) is a consumer cyclical company that owns, develops, operates, and franchises casual dining restaurants. The company’s core business depends on consumer purchasing power and the economy’s health.
With interest rates remaining high for a long time, the economy has started cooling off, and consumer purchasing power has taken a significant hit. Nevertheless, the parent of Chili’s and Maggiano’s Little Italy has been shrugging off fetch concerns owing to its solid fiscal fourth-quarter results. Brinker International, Inc. (NYSE:EAT)’s final three months concluded in June, and the number of visitors to its dining locations during this time was unexpectedly robust. A close to 6% increase compared to the previous year and higher prices resulted in a 13.5% rise in sales at its stores during the fourth quarter. This contributed to an increase in total annual earnings to $4.4 billion, marking a nearly 7% rise from fiscal year 2023.
The company’s profit margin continues to raise concerns. The company’s full-year diluted earnings per share of $4.10 came below analysts’ estimates. Management projecting earnings of $4.75 a share for fiscal 2025 was also below expectations.
After digging through 912 hedge fund portfolios for this year’s June quarter, Insider Monkey discovered that 33 had bought stakes in the firm. Brinker International, Inc. (NYSE:EAT)’s biggest shareholder out of these is D. E. Shaw’s D E Shaw through a stake worth $131 million.
4. Redfin Corporation (NASDAQ:RDFN)
52 Week Range: $4.26 – $15.29
Current Share Price: $13.90
Short % of Shares Outstanding: 16.93%
Number of Hedge Funds holding stakes as of Q2 2024: 20
Redfin Corporation (NASDAQ:RDFN) is a real estate company that operates an online real estate marketplace and processes real estate services, including assisting people in buying and selling properties. The company also uses digital platforms to connect consumers with rental properties.
In 2021, nearly half of Redfin Corporation (NASDAQ:RDFN)’s revenues were generated through iBuying, a business that involved buying houses from sellers who were ready to sell them with the goal of making a profit by reselling them. However, the business became risky with the rise in interest rates to record highs.
Currently, Redfin Corporation (NASDAQ:RDFN) is concentrating on its range of services, which encompass property brokerage, mortgage services, and closing services. The firm has 1,719 lead brokers on staff, representing 0.77% of all properties sold in the US during the second quarter of 2024. Additionally, over a quarter of Redfin’s clients also utilized Redfin for their mortgage needs during this period, enabling the company to generate more income from each mortgage deal.
Even though the service business boasts a high gross margin, it is susceptible to an overheating real estate market that is crumbling amid the high interest rates. With few homes changing homes, given the reduced consumer purchasing power, the company is starting the risk of its revenue and earnings taking a significant hit.
With sales remaining sluggish because of high home buying costs that make both house hunters and prospective sellers skittish, investors are becoming increasingly skeptical about the company’s prospects amid the high interest rate environment.
Until mortgage rates drop to a level that can trigger a high rate of home buying, Redfin could remain under pressure, which explains the high short interest rate of 16.93%. According to Insider Monkey’s second quarter database, 20 hedge funds were bullish on Redfin Corporation (NASDAQ:RDFN), compared to 18 funds in the prior quarter.
3. InterDigital, Inc. (NASDAQ:IDCC)
52 Week Range: $74.65 – $140.60
Current Share Price: $135.08
Short % of Shares Outstanding: 17.50%
Number of Hedge Funds holding stakes as of Q2 2024: 29
InterDigital, Inc. (NASDAQ:IDCC) is a global research and development company specializing in wireless visual artificial intelligence and other related technologies. It designs and develops technologies that enable connection in a range of communications and entertainment products and services.
InterDigital, Inc. (NASDAQ:IDCC) remains in a strong position for future growth owing to its world-class wireless, video, and AI innovation, accelerating business momentum, and large addressable markets. Likewise, management has set out an ambitious plan to generate billions in annual recurring revenue and $600 million in adjusted EBITDA by 2030.
The $1 billion annual recurring revenue target comes on the company’s revenues more than doubling over the last four years due to improved execution across key business slimes. The company is targeting revenues of upwards of $200 million in its Consumer Electronics/Internet of Things segment. It’s also targeting $300 million in revenues in its video streaming segment.
InterDigital, Inc. (NASDAQ:IDCC) has shown strong financial stability by increasing its quarterly dividend payment from $0.40 to $0.45 per share, a move that will become official in the fourth quarter of 2024.
The firm also shared impressive financial outcomes for the second quarter of 2024, achieving revenues of $223 million and setting a new record for the first half of the year with $487 million. This strong performance has led InterDigital to revise its annual revenue forecast upward by $70 million, now anticipating revenues to fall between $690 million and $740 million.
Nevertheless, InterDigital, Inc. (NASDAQ:IDCC) remains one of the worst 52-week high stocks to buy, according to short sellers going by the high short interest of 17.50%. The pessimism stems from growing concerns that the company faces stiff competition from other tech companies with big balance sheets in developing advanced technologies, such as artificial intelligence.
By the end of 2024’s June quarter, 29 out of the 912 hedge funds part of Insider Monkey’s database had held a stake in the firm. InterDigital, Inc. (NASDAQ:IDCC) largest hedge fund investor is Spencer M. Waxman’s Shannon River Fund Management due to its $51.69 million investment.
Here is what FPA Queens Road Small Cap Value Fund said about InterDigital, Inc. (NASDAQ:IDCC) in its first quarter 2024 investor letter:
“InterDigital, Inc. (NASDAQ:IDCC) is a research and development organization that develops and acquires wireless and video patents across key technologies. The company has a history of strong financial performance, opportunistically buys back shares, and pays a modest dividend. IDCC has been successfully renewing its wireless licensing agreements (Apple in 2022, Samsung in 2023) and has a growing stream of recurring licensing revenues across consumer electronics, internet of things (IoT) and automotive customers. CEO Liren Chen joined IDCC in 2021 from Qualcom and has been hiring other former Qualcom managers. The company bought back $338m of stock last year and authorized another $300m buyback in its Q4 2023 earnings release.”
2. Cinemark Holdings, Inc. (NYSE:CNK)
52 Week Range: $13.19 – $29.07
Current Share Price: $28.62
Short % of Shares Outstanding: 17.66%
Number of Hedge Funds holding stakes as of Q2 2024: 32
Cinemark Holdings, Inc. (NYSE:CNK) is a communications services company engaged in the motion picture exhibition business with its subsidiaries. The company operates theaters with screens in 42 states in the US and 13 countries.
Short sellers have been pessimistic about the company’s long-term prospects owing to the underwhelming performance of the exhibition industry throughout 2024. The high interest rate environment has been unfavorable to the whole sector, significantly affecting consumer purchasing power. With a short interest of 17.66%, it remains one of the worst 52-week high stocks to buy, according to short sellers.
Nevertheless, Cinemark Holdings, Inc. (NYSE:CNK)’s shares have demonstrated resilience, with investors looking beyond current challenges towards a potential rebound in 2025. Supporting the optimism is the company’s solid second-quarter results
Revenue in the quarter came in at $734 million with a net profit of $47 million and an Adjusted EBITDA figure of $142 million. The company welcomed 50 million movie attendees worldwide and surpassed the recovery of the North American film sector by 400 basis points. Cinemark also kept its market position growing against the fiscal year 2019 figures in both the US and Latin America.
Amid the high short interest, the stock trades at a discount with a price and earnings multiple of 17. Insider Monkey’s second quarter of 2024 survey revealed that 32 hedge funds had bought a stake in the company. Out of these Cinemark Holdings, Inc. (NYSE:CNK)’s largest hedge fund investor is William B. Gray’s Orbis Investment Management since it owns 13.37 million shares that are worth $289.08 million.
Here is what Carillon Chartwell Small Cap Value Fund said about Cinemark Holdings, Inc. (NYSE:CNK) in its Q2 2024 investor letter:
“Cinemark Holdings, Inc. (NYSE:CNK) operates movie theaters across North and South America. Recent results exceeded expectations as film box office numbers were strong, driving revenue and profits. Investors also began to anticipate a stronger slate of movie releases in coming years.”
1. TG Therapeutics Inc (NASDAQ:TGTX)
52 Week Range: $6.46 – $26.41
Current Share Price: $25.25
Short % of Shares Outstanding: 19.06%
Number of Hedge Funds holding stakes as of Q2 2024: 38
TG Therapeutics Inc (NASDAQ:TGTX) is a biopharmaceutical company that engages in the acquisition, development, and commercialization of treatments. Its primary treatment option is BRIUMVI for the treatment of multiple sclerosis.
While the stock is trading near its 52-week highs, the rally has resulted in the company delivering positive clinical trial and financial results. Likewise, the company has benefited from strategic partnerships and a strong pipeline of promising therapies.
Nevertheless, the short interest rate on the company’s outstanding shares stands at a whopping 19.06%, affirming why it is one of the worst 52-week high stocks to buy, according to short sellers. The high short interest stems from growing concerns about the company’s dependence on its one drug for multiple sclerosis. The drug losing its patent and facing competition from other drugs could spell more trouble for the company’s core revenue base.
Sales for Briumvi have been increasing in recent years, helping propel TG Therapeutics Inc (NASDAQ:TGTX) to its first-ever quarterly profit. The company delivered solid financial results for its second quarter of 2024, with the sales of its leading drug, BRIUMVI, exceeding forecasts by $72.6 million. This strong performance has prompted the company to increase its annual revenue forecast from $290 million to $300 million.
Following the impressive second-quarter results, TG Therapeutics Inc (NASDAQ:TGTX) has sought to strengthen its prospects in the industry by implementing a share repurchase program. Nevertheless, the stock is trading at a premium with a price-to-earnings multiple of 42, considering the average P/E for healthcare stocks is 34.
At the end of June, there were 38 funds in our database long TG Therapeutics Inc (NASDAQ:TGTX), up from 29 in the previous quarter. Guy Levy Soleus Capital was the biggest stakeholder of the company, which disclosed ownership of 3.64 million shares in its latest 13F filing.
While we acknowledge the potential of TGTX to grow, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TGTX, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
