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Friday, December 28, 2007 10:07:30 PM
By Jason Raznick
RealMoney.com Contributor
12/26/2007 2:49 PM EST
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5 Strategies for Surviving Volatile Markets
Concerns over the state of the economy have weighed on investor sentiment, sending many high-quality stocks down and creating potential short-squeeze trading opportunities. The short interest ratio (or simply the short ratio) is a measure of a stock's short position divided by the average daily volume. In other words, it is a measure of the number of days it would take short-sellers to cover their entire positions if the share price begins to appreciate.
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2. The Next Debt Danger: Second Lien Loans
3. Looming Cash Piles Bode Well
4. Prepare for More of a Selloff; Look at AAPL
5. Don't Lean on Last Year's Market for Confidence
A short squeeze takes place when the share price of a shorted stock appreciates, sending short-sellers scrambling to cover their bearish positions. If there is some unexpected good news, a heavily shorted stock may surge, resulting in good returns.
When I'm looking for potential short-squeeze plays, I look for certain situations. Today, I looked at companies in the health care sector that had a short ratio above 15 and a market cap over $300 million. (You can see the rest of the Top Short-Squeezes on Stockpickr.)
One highly shorted stock is SurModics (SRDX - commentary - Cramer's Take - Rating), with a short ratio of 30.9 and 31.78% of its float shorted. The developer of drug-delivery technologies for the health care industry announced a $35 million share-repurchase program in November. It also announced the completion of its prior buyback program, under which it repurchased about one million shares at an average price of $34.76 per share.
Additionally, SRDX not only beat Wall Street expectations but also reported record revenue for the fiscal fourth quarter. Revenue rose 21% to $21.3 million. EPS was also ahead at 47 cents. Some other factors that weigh in favour of the stock are the company's P/E ratio of 287.55 and a P/E/G ratio of 1.5. Also, insiders own a large part of the company.
The stock is owned by the Winslow Green Growth Fund, which recently increased its stake in the company. This fund also owns Fuel Tech (FTK - commentary - Cramer's Take - Rating), which has a short ratio of 9.3, Whole Foods Market (WFMI - commentary - Cramer's Take - Rating), with a short ratio of 4.5, and First Solar (FSLR - commentary - Cramer's Take), with a short ratio of 1.5.
SRDX has a diverse portfolio, which is good during economic uncertainties. It recently acquired BioFX Laboratories for $22.7 million to broaden its product base and has signed a record number of licensing deals this year. With the board and smart funds buying shares, the company issuing a bullish earnings reports and the high short-ratio, it may be a good idea to add this stock to your portfolio, which I would do if the shares dip below $53.
Recent SRDX News
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/23/2024 08:06:26 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/23/2024 08:05:18 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/20/2024 08:25:15 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/20/2024 08:24:34 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/08/2024 08:02:09 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 07/31/2024 12:00:27 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 07/31/2024 11:00:10 AM
- Surmodics Reports Third Quarter of Fiscal Year 2024 Financial Results • Business Wire • 07/31/2024 11:00:00 AM
- Form SC 13G/A - Statement of Beneficial Ownership by Certain Investors: [Amend] • Edgar (US Regulatory) • 07/09/2024 05:49:02 PM
- Form DEFM14A - Definitive proxy statement relating to merger or acquisition • Edgar (US Regulatory) • 07/08/2024 08:28:06 PM
- Kuehn Law Encourages, FFNW, HCP, CALB, and SRDX Investors to Contact Law Firm • PR Newswire (US) • 06/17/2024 12:08:00 PM
- Form SC 13G - Statement of acquisition of beneficial ownership by individuals • Edgar (US Regulatory) • 06/10/2024 08:57:37 PM
- Surmodics Awarded Thrombectomy Products Agreement with Premier, Inc. • Business Wire • 06/10/2024 11:00:00 AM
- Rowley Law PLLC is Investigating Proposed Acquisition of Surmodics, Inc. • PR Newswire (US) • 05/29/2024 10:36:00 PM
- Form DEFA14A - Additional definitive proxy soliciting materials and Rule 14(a)(12) material • Edgar (US Regulatory) • 05/29/2024 12:04:56 PM
- Form DEFA14A - Additional definitive proxy soliciting materials and Rule 14(a)(12) material • Edgar (US Regulatory) • 05/29/2024 11:28:28 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/29/2024 11:27:01 AM
- Surmodics Enters into Definitive Agreement to be Acquired by GTCR for $43.00 Per Share in Cash, Representing an Approximate Equity Value of $627 Million • Business Wire • 05/29/2024 11:00:00 AM
- Form SD - Specialized disclosure report • Edgar (US Regulatory) • 05/24/2024 08:01:05 PM
- Surmodics Reports Second Quarter of Fiscal Year 2024 Financial Results; Updates Fiscal Year 2024 Financial Guidance • Business Wire • 05/01/2024 11:00:00 AM
- Surmodics to Report Second Quarter of Fiscal 2024 Financial Results on May 1 • Business Wire • 04/19/2024 11:00:00 AM
- Surmodics to Participate in Upcoming Investor Conferences in March and April • Business Wire • 02/27/2024 01:00:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/12/2024 09:22:07 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/12/2024 09:18:16 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/12/2024 09:16:12 PM
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