In this article, we discuss the 5 most shorted stocks to watch in September. If you want to read our analysis on short selling, go directly to the 10 Most Shorted Stocks in September.
5. MicroStrategy Incorporated (NASDAQ:MSTR)
Number of Hedge Fund Holders: 18
Float Shorted: 39.68%
MicroStrategy Incorporated (NASDAQ:MSTR) is a Tysons, Virginia-based provider of business intelligence and analytics, cloud-based services, and mobile software. The company has the distinction of being the biggest corporate holder of Bitcoin, with ownership of over 130,000 Bitcoins.
At the current market price of around $30,000 per Bitcoin, the company’s stake is valued at over $2.47 billion as of September 2022. It should be noted that MicroStrategy Incorporated (NASDAQ:MSTR) is deep in the red in terms of its Bitcoin holdings, as it invested nearly $4 billion to buy 130,000 Bitcoins with an average purchase price of over $30,300 per Bitcoin.
The share price of MicroStrategy Incorporated (NASDAQ:MSTR) has also come under pressure after the Attorney General’s Office for the District of Columbia filed a civil complaint against the company and CEO Michael J. Saylor. The State AG claims that Mr. Saylor has been evading income taxes despite residing in the District of Columbia for the past decade.
4. EVgo, Inc. (NASDAQ:EVGO)
Number of Hedge Fund Holders: 18
Float Shorted: 31.31%
EVgo, Inc. (NASDAQ:EVGO) is a Los Angeles, California-based provider of public electric charging stations and provides its services through more than 850 fast charging stations spread across 30 states.
The US government is expected to approve a budget of $900 million for the construction of electric vehicle (EV) charging stations across 35 US states. This funding is part of the $1 trillion infrastructure bill approved in November 2021. The Biden Administration wants 50% of all new vehicles to be either electric or plug-in hybrid electric models. To facilitate this, the government intends to provide the infrastructure of over 500,000 EV charging stations across the US. The government has also provided $3 billion to US Postal Services to upgrade its delivery vehicle fleet to electric.
Despite all these developments, the Street does not expect EVgo, Inc. (NASDAQ:EVGO) to become profitable before 2025. In Q2 2022, EVgo, Inc. (NASDAQ:EVGO) posted an adjusted EBITDA of -$19.8 million.
3. Revolve Group, Inc. (NYSE:RVLV)
Number of Hedge Fund Holders: 20
Float Shorted: 35.30%
Revolve Group, Inc. (NYSE:RVLV) is a Cerritos, California-based fashion retailer targeting Generation Z and Millennial customers through various in-house brands.
Trevor Young at Barclays resumed coverage on Revolve Group, Inc. (NYSE:RVLV) stock on August 15 and downgraded it from an Equal Weight to an Underweight rating with a revised target price of $20, down from $30. The analyst highlighted that Revolve Group, Inc. (NYSE:RVLV) is strong in terms of execution and is growing at a quicker pace than its competitors due to its small base. However, Revolve Group, Inc. (NYSE:RVLV) stock is trading at an unjustifiable 100% premium against its competitors based on the expected revenues and earnings for 2023. In addition, there is a slowdown in revenue growth, and gross margins could come under pressure as full-price sales revert to normal levels.
Polen Capital discussed its outlook on Revolve Group, Inc. (NYSE:RVLV) in its Q1 2022 investor letter. Here’s what the firm said:
“Online fashion retailer Revolve had another favorable quarter, and our investment in this company has continued to compound at a high level. We were impressed with the company’s recent results, especially the combination of customer growth, the growing number of orders per customer, and improving average order values. We believe the company still has considerable room for growth as it benefits from the bourgeoning trend of fashion going online, while its investments in adjacent categories, like beauty, are increasing the market opportunity its addressing.”
As of Q2 2022, 20 hedge funds reported owning a stake in Revolve Group, Inc. (NYSE:RVLV).
2. Beyond Meat, Inc. (NASDAQ:BYND)
Number of Hedge Fund Holders: 20
Floated Shorted: 36.61%
Beyond Meat, Inc. (NASDAQ:BYND) is a California-based manufacturer of plant-based meat substitute products.
In a research note issued on September 21, Michael Lavery at Piper Sandler slashed the price target on Beyond Meat, Inc. (NASDAQ:BYND) from $9 to $8 and reiterated an Underweight rating on the stock. The stock price is already hovering around an all-time low, but the target price assigned by the analyst sees a further downside of over 50% from the closing price as of September 21. The analyst highlighted an acceleration in decline in retail sales for Beyond Meat, Inc.’s (NASDAQ:BYND) products. Although the company could see strong jerky sales for the remainder of 2022 due to heavy discounting and high inventory, it could also end up squeezing the margins due to operational inefficiencies.
Here’s what Horos Asset Management said about Beyond Meat, Inc. (NASDAQ:BYND) in its Q1 2022 investor letter:
“What about the other asset class that has attracted the most attention from the investment community in recent times? Beyond Meat is the other company whose valuations we did not understand and whose share price has also declined drastically in the last year and a half.”
1. Sirius XM Holdings Inc. (NASDAQ:SIRI)
Number of Hedge Fund Holders: 21
Float Shorted: 31.30%
Sirius XM Holdings Inc. (NASDAQ:SIRI) is a New York-based online and satellite radio broadcasting company with over 150 million subscribers.
Experts believe that Sirius XM Holdings Inc. (NASDAQ:SIRI) could be headed towards a significant downturn next year as they anticipate a decline in net subscriber additions for the rest of 2022. Following the ease of the pandemic, there is now a shift towards other activities as opposed to listening to the radio. People are going out to enjoy summer vacations without lockdowns and restrictions. In a research note issued to investors on August 1, Jeffrey Wlodarczak downgraded Sirius XM Holdings Inc. (NASDAQ:SIRI) from a Buy to a Hold rating and lowered the price target from $7.55 to $7.10.
Two Sigma Advisors raised its stake in Sirius XM Holdings Inc. (NASDAQ:SIRI) by 42% during Q2 2022.
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