3 Stocks to Consider Shorting in Today's Market

December 25, 8:00 am

As a financial journalist with an eye for unique insights gained from alternative data, I have identified three stocks that could present valuable shorting opportunities. Traditional analysis methods often overlook the rich narratives that the latest alternative data can tell us about the underlying health and public perception of a company. Here, we delve into three stocks that exhibit concerning trends that investors should consider.

Fox Factory Holding Corp. (FOXF)

Fox Factory Holding, a company known for high-performance suspension products, has been experiencing a sustained dip in their stock price. Currently at $29.63 per share, a 1.6% downturn, the company faces multiple headwinds. Alternative data suggests a consistent slide in social media engagement with decreasing followers on both Twitter and Instagram. Further, a decline in web traffic and a shrinking digital fan base on platforms like Facebook hint at waning consumer attention.

The troubles go beyond the digital façade: Internal company metrics like job posts, employee satisfaction, and business outlook taken from current employees all show a negative trend. These internal issues could predict operational challenges and a potential downward trajectory for the stock, making FOXF a candidate for shorting.

Canoo Inc. (GOEV)

Despite a recent dramatic surge in price, up 1030.8%, Canoo's fundamentals and alternative data raise red flags. The electric vehicle (EV) company's stock, priced at $0.13 per share, is shadowed by declining social media presence, reduced job postings, and falling sentiment in stock forums. Perhaps more tellingly, dissatisfaction among employees is on the rise alongside a negative shift in business outlook internally.

Canoo's financial fundamentals and operational metrics, such as revenue performance and insider selling activities, exhibit worrying signs. Collectively, these factors suggest that the recent price spike may not be sustainable, positioning GOEV as a potential short-selling target.

Nikola Corporation (NKLA)

Nikola, another player in the EV space, has seen its stock drop 8%, now trading at $1.25 per share. A set of similar issues plagues Nikola, with declines in social media followers and engagement, suggesting lessening brand momentum. The job posting data mirrors the downward trends seen in digital popularity, perhaps indicative of a strategic contraction or hiring freeze.

Internally, sentiment is dimming among employees, who report a downtrend in business outlook. These internal signals, combined with a contraction in web traffic and community support online, build the case for NKLA being a viable short option in the current market.

In sum, the stories that alternative data tells us about Fox Factory, Canoo, and Nikola Corporation signal potential trouble. Though shorting carries risks, these companies exhibit signs of distress that may not be readily apparent in conventional metrics posing them as compelling for investors considering short positions.

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