On the other hand, with baby boomers aging and genetic mapping costs falling, the prospect of higher testing volume is readily apparent. I wouldn’t be shocked to see the personalization of medical care pick up dramatically over the next decade on lowered expenses, which would be a big boost to Life Technologies and its buyer, Thermo Fisher Scientific Inc. (NYSE:TMO).
All told, I feel this merits a watch-and-wait approach.
No foundation underneath their shoes
Footwear retailing chain Foot Locker, Inc. (NYSE:FL) has seen a dramatic boost in short-sellers in recent weeks, and one can only speculate that it has to do with an expected slowdown by the world’s most recognizable footwear maker, NIKE, Inc. (NYSE:NKE). In Nike’s most recent earnings report, the company delivered EPS-topping results but also cautioned that it was unsure when growth in China would pick up, causing concern among investors.
However, if short-sellers are hoping for China’s growing pessimism to spread across to U.S. footwear sales, they have another thing coming. Foot Locker, Inc. (NYSE:FL) does have overseas exposure, but it’s to Europe, Australia, and South Korea, not China, and comparable-store sales in its first-quarter results were up 5.2%. Foot Locker has been executing its plan to remodel and relocate nonperforming stores with perfection and continues to carry a good blend of products in its locations that necessitates little brand-name discounting.
Furthermore, Foot Locker, Inc. (NYSE:FL) has been a big shareholder advocate in recent years. Its payout has more than doubled to $0.20 per quarter from just $0.09 in 2006, resulting in a yield topping 2% for shareholders. With close to $1 billion in net cash, strong comparable-store sales growth and a forward P/E of just 11, I don’t feel short-sellers have much ground to stand on.
Foolish roundup
This week it’s all about overanticipating short-term stock moving events. Spinoffs, share offerings, and a single earnings report from a major customer are certainly events that could cause temporary disruptions in the underlying fundamentals of a company, but they aren’t likely to affect your long-term investing thesis.
What’s your take on these three stocks? Do short-sellers have these stocks pegged, or are they blowing smoke? Share your thoughts in the comments section below.
The article Shorts Are Piling Into These Stocks. Should You Be Worried? originally appeared on Fool.com and is written by Sean Williams.
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, Nike. It also recommends Thermo Fisher Scientific.
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