Want to know which companies will do well this reporting season once their latest profit numbers have been released?
The stocks that fund managers are short right now.
That’s right, companies that have been targeted by the short-sellers end up being the stocks that perform best, according to Deutsche Bank’s equity strategist, Tim Baker. It might be seen as a dangerous strategy, but it implies those willing to take on the short sellers this reporting season will make the real money.
Baker has done the numbers and has told clients the most shorted stocks in the major S&P ASX 200 usually end up doing the best once the earnings news is out of the way.
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