Best Stocks to Short Today: Uncovering Weakness with Alternative Data Insights

February 15, 8:00 am

Investors are always looking for potential opportunities, whether those be long or short positions. With alternative data providing early signals of a company’s underlying performance, savvy traders can make informed decisions on which stocks might be ripe for shorting. Today, we delve into three stocks that, based on current alternative data insights and fundamentals, appear to be strong candidates for shorting: Express, Vroom, and Tilly's.

Express Inc. (EXPR) - Signs of Prolonged Distress?

Express has witnessed a sharp decline over the past few days, with its stock price crumbling by 34.2%, now at $3.890 per share. The fashion retail landscape is rapidly evolving, and Express seems to be struggling to keep pace. Alternative data reveals several red flags: a drop in social media followings on platforms such as Twitter and Instagram hints at waning brand engagement. A decrease in job postings and mobile app downloads may reflect operational scaling back and a weaker market position. Employee sentiment and business outlook are reportedly low, which can often precede further downturns. Additionally, dwindling web traffic could signal a retreat in consumer interest. These indicators suggest potential ongoing underperformance, making EXPR a stock to watch for shorting opportunities.

Vroom Inc. (VRM) - Is the Engine Stalling?

Online car retailer Vroom has also faced recent hurdles, evident by a 13.3% decrease in stock price, now standing at $15.920 per share. The alternative data points are particularly troubling: sluggish social media metrics and a downturn in job posts indicate a rough patch. The decrease in app downloads could imply a drop in consumer engagement or a shift in consumer buying preferences. Insider selling is often interpreted as a lack of confidence from those who know the company best. Additionally, a year-over-year revenue drop challenges growth narratives. As web visibility fades and Facebook fans decrease, Vroom's road to recovery seems to have a few more bumps, potentially making VRM an attractive short target.

Tilly's Inc. (TLYS) - Deceptive Uptick?

Surf and skate clothing retailer Tilly's marginally rose by 3.4% over the last few days, trading at $7.340 per share, yet beneath the surface, vulnerabilities are visible. Social media declines across Twitter and Instagram, combined with reduced job postings, hint at an ailing operational stance. Financial concerns loom as revenue drops and web traffic falters, this despite a recent uptick in share price. The low employee business outlook could be indicative of internal challenges and may translate into further difficulties ahead. Given these factors, TLYS presents itself as a potential short play in light of its seemingly insubstantial stock price ascent.

In the fast-paced world of stock trading, the early identification of negative trends is key to capitalizing on short-selling opportunities. Through the lens of alternative data, Express, Vroom, and Tilly's all showcase signs of potential decline, providing a case for investors looking to short. Nonetheless, it is always wise to undertake thorough research and consider a holistic approach to investment decisions.

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