In May 2008 James Montier, fund manager at GMO, couldn’t find opportunities to invest, he wrote an article about short selling: Joining The Dark Side: Pirates, Spies and Short Sellers. His research found that the ideal short candidates are the companies that have these three characteristics:
1. Stocks that are sold at high P/S ratio
2. Companies that have low Piotroski F-score
3. Companies that have double-digit asset growth.
He found that companies with any of these characteristics underperformed the market.
Considering this, we have created a James Montier Short Screen in our All-In-One Screener with these filters:
1. P/S ratio is higher than 90% of the companies in the industry
2. Piotroski F-score is 3 or less
3. Five-year average asset growth is higher than 10%.
With these filters we get the list of the stocks that meet the criteria:
|Symbol||Company||Share Price ($)||Market Cap (mil)||F Score||P/S|
|SNT||Senesco Technologies, Inc.||0.29||28.5||2||204|
|UQM||UQM Technologies, Inc.||0.78||29.6||2||2.9|
|REFR||Research Frontiers, Inc.||2.93||55.9||2||66|
|ACHN||Achillion Pharmaceuticals, Inc.||6.51||474.7||2||1922|
|BPAX||Biosante Pharmaceuticals Inc||1.35||25.2||2||57.9|
|HUSA||Houston American Energy Corporation||0.8197||31.1||2||26.9|
|ECTE||Echo Therapeutics Inc||1.46||57.6||2||128.9|
|CGEN||Compugen Ltd. (USA)||3.56||123.3||3||110.6|
|HEB||Hemispherx BioPharma, Inc||0.3587||47.2||3||292.8|
|GYRO||Gyrodyne Company of America, Inc.||112.83||167.5||3||30.4|
|CRUS||Cirrus Logic, Inc.||38.07||2448.9||3||5.7|
|CNQR||Concur Technologies, Inc.||67.37||3519.5||3||10.1|
|RCKB||Rockville Financial Inc||11.85||340.7||3||3.8|
|ETAK||Elephant Talk Communications Inc.||1.31||156.2||3||4.8|
Not surprisingly, the prices of many of these stocks are already at close to 52-week lows and almost all of them don’t pay dividends.
We will monitor the performances of these stocks. The stocks are in the portfolio James Montier Short Screen.
This is the link to the screen.