Short Sellers Attack Hawaiian Holdings, Inc. (HA)

Get ready for the rebound

Clearly, short sellers — and the market as a whole — are skeptical that Hawaiian can produce the earnings growth that analysts currently project. If Hawaiian proves doubters wrong, the stock could be a prime candidate for a short squeeze. Based on recent trading volumes, it would take 13 days for all short sellers to cover their positions, up from just four days earlier this year.

HA Days to Cover Short, data by YCharts

In other words, if a positive earnings surprise, better than expected guidance, or other upbeat corporate news inspires many shorts to close their positions, the result could be a buying frenzy. This in turn would drive Hawaiian’s share price significantly higher. Given Hawaiian’s compressed multiple and improving earnings, the stock appears to offer a very attractive risk to reward trade-off today.

The article Short Sellers Attack Hawaiian Holdings originally appeared on Fool.com and is written by Adam Levine-Weinberg.

Fool contributor Adam Levine-Weinberg owns shares of Hawaiian Holdings and is long October 2013 $6 calls on Hawaiian Holdings. The Motley Fool has no position in any of the stocks mentioned. 

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