Bear Market Bets: 2 Stocks to Consider Shorting Now

August 15, 8:00 am

As savvy investors look to capitalize on current market dips and shifts, we at AltIndex are always hunting for signs that a stock might be ripe for shorting. Our journey today takes us through the rough patches of two companies whose alternative data insights do not bode well for their short-term prospects. Let’s examine why Natuzzi and ContextLogic could be solid picks for those looking to bet against the odds.

Natuzzi: A Faltering Furnisher

Natuzzi (NTZ), the Italian furniture manufacturer, is feeling the squeeze with its shares down 3.5%, currently hovering at $4.25 per share. A dive into not just their financials but alternative data provided by employee sentiment and online presence paints a grim picture. A marked and continued fall in social following across platforms like Twitter and Instagram signals fading consumer interest. In tandem, a decrease in web traffic and social media engagement suggests slumping brand reach and sales prospects.

Most worrisome, perhaps, is the negative internal outlook reported by Natuzzi's own workforce. Employees expressing doubt about the company's direction often precede broader operational troubles. Factoring in a year-over-year revenue decline, it seems the market is catching up to these red flags. With external interest waning and internal confidence dwindling, shorting NTZ could be a strategic move.

ContextLogic: Wishing on a Falling Star

ContextLogic (WISH), known for its bargain shopping app Wish, is similarly beleaguered, seeing its stock dip 4.8% to a current price of $5.39 per share. Declining social media followers, a thinning job post board, and shrinking mobile app downloads speak volumes on the company's stagnation in the e-commerce sphere. Moreover, the persisting drop in web traffic and Facebook fans reflects a possible shift in consumer preference away from their platform.

Both external and internal indicators are distressing; employees themselves harbor a low business outlook. When those on the ground lose faith, it often precipitates a slowdown in innovation and performance—troubling signs for investors. The falling revenue year-over-year is the unsettling cherry on top. For those considering short plays, WISH might just fulfill that strategy.

While neither short-selling nor any investment venture is devoid of risk, Natuzzi and ContextLogic present compelling cases for those looking to profit from potential downtrends. These indications, while not exhaustive, suggest that these companies may face further challenges ahead that could drive their stock prices lower. As with all investment decisions, thorough research and due diligence are indispensable parts of the trading equation.

Read more about best stocks to short.

This article was written by an experimental AI tool. Consider checking important information.

Get More Insights

Sign up and get access to a personalized dashboard, deeper insights, AI stock picks, stock alerts, weekly newsletter and much more.