5 Most Shorted Stocks to Watch in July

2. Revlon, Inc. (NYSE:REV)

Float Shorted: 53.29%

Number of Hedge Fund Holders: 36

Revlon, Inc. (NYSE:REV) is a New York-based cosmetics, fragrance, personal care, and skincare company.

Revlon, Inc. (NYSE:REV) filed for bankruptcy on June 17 as the firm faced supply chain challenges that increased the cost of raw materials. The company had been in business for nearly nine decades but could not survive the impact of inflation and labor shortages. The bankruptcy filing will help Revlon, Inc. (NYSE:REV) in restructuring its capital structure and improve its long-term outlook. Revlon, Inc. (NYSE:REV) has filed for Chapter 11 bankruptcy which means it will not cease operations; instead, it will look for ways to make a comeback. However, the short-sellers are betting against the company’s recovery and think that Revlon, Inc. (NYSE:REV) is on the brink of completely wrapping up its operations.

Here’s what Mittleman Brothers Investment Management said about Revlon, Inc. (NYSE:REV) in its Q1 2022 investor letter:

“For Revlon, given very recent reports by analysts on the extent to which a slowdown in China, higher input costs, and rising interest rates might impact it, MIM provides additional commentary herewith to supplement the update in WWOAW. Revlon’s business is rebounding from the pandemic, despite its stock price continued insistence to the contrary. Sales were +9% in 2021 to $2.08B, adjusted EBITDA +22% to $293M (14.1% EBITDA) margin, gross margin improved to 59.4% from 57.1%. MIM sees the sales rebound accelerating in 2022, estimating +15% to $2.4B (the 2019 pre-pandemic level), and EBITDA at $350M (14.5% EBITDA margin) vs. 12-year average adjusted EBITDA margin of 16.5% (2008-2019) before COVID crushed 2020. The Revlon brand itself performed much better in Q4 2021 (consumption at retail) than the wholesale numbers they reported (Revlon’s sales to its customers, hindered by supply chain disruption) would imply…” (Click here to see the full text)

Of the 912 hedge funds tracked by Insider Monkey at the end of Q1 2022, 36 funds held a stake in Revlon, Inc. (NYSE:REV).