Questcor Pharmaceuticals
Why are investors shorting Questcor Pharmaceuticals?
Two words succinctly describe why Questcor has been pummeled by short-sellers: FDA probe. The Food and Drug Administration announced a probe into Questcor’s marketing practices in September of last year, with the premise being that it seemed odd that the orphan drug maker of Acthar Gel would charge $23,000 per vial across all 19 indicated treatments. However, Questcor’s bottom-line figures would tell another tale, with the company reporting a net sales jump of 113% and adjusted EPS growth of 132% in the fourth quarter.
Is this short interest deserved?
The perception of doubt definitely exists, with noted short-seller Andrew Luck of Citron Research issuing a scathing report on Questcor over the summer. The FDA probe isn’t a welcome sign for investors either. But FDA probes end with no monetary penalties as often as they end with them, so it’s somewhat of a toss-up what to expect with the FDA’s research into Questcor’s marketing practices. For now, I’d suggest abstinence and avoid the company altogether from both a long and short perspective.
UniPixel
Why are investors shorting Uni-Pixel?
The pessimism surrounding Uni-Pixel certainly has nothing to do with its results, as the flexible-electronics manufacturer announced a multimillion-dollar deal with an unnamed PC maker and struck a collaborate deal with Texas Instruments Incorporated (NASDAQ:TXN) all within the past few months. What has investors unnerved is the 412% run the stock has had in less than six months despite reporting just $76,200 in revenue last year.
Is this short interest deserved?
I’d absolutely say some skepticism is in order, considering that Uni-Pixel is practically a micro-cap company that’s ramping up production for the first time in its history and has never turned a profit. I, for one, would really like to see Uni-Pixel prove its value in the earnings column before investors jumped aboard this rocket. Conversely, highly short-sold micro-and-small-cap companies have a penchant for disappointing short-sellers with short squeezes. In other words, tread wisely.
Sodastream International Ltd (NASDAQ:SODA)
Why are investors shorting SodaStream International?
Investors seem bent on betting against SodaStream for a number of reasons, with the most obvious being that the convenience factor of simply purchasing a 2-liter soda is so much easier than purchasing the individual soda components and making it yourself. A trend toward healthier living habits is also working against SodaStream, which is finding it more difficult to push its soda products on a consumer base that desires to get in shape.
Is this short interest deserved?
I have been decisively negative on Sodastream International Ltd (NASDAQ:SODA) since its debut, but I’m about ready to turn the corner on that opinion. SodaStream’s products are right in the sweet spot for most investors — $80 to $200 for the machines — and it’s valued at only 15 times forward earnings despite an expected growth rate of 15% next year. Assuming it can take my fellow Fool Rick Munnariz’s suggestions and move into the wellness market, as well as expand its partnerships, I could see short-sellers potentially getting burned here.
Which most-hated Nasdaq company do you have on your radar? Share your thoughts in the comments section below.
The article The Nasdaq’s 5 Most Hated Stocks originally appeared on Fool.com.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of, and recommends, Netflix and SodaStream.
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