Top Companies To Short Today As Stocks Surge On Coronavirus Plasma Treatment

Stocks were flying higher this morning on optimism after the U.S. FDA issued an emergency use authorization of convalescent plasma for hospitalized Covid-19 patients, essentially using recovered patients’ blood to help reduce mortality rate. Effectiveness was praised to be as high as 35% by the President, as he announced consideration of fast tracking an experimental vaccine developed in the UK. This comes amid cases in the U.S. are dropping considerably, from 64,000 daily at the peak to lower than 49,000 recently – on Sunday, only 37,000, according to Johns Hopkins University. Still, things look a little too similar to past euphoria in the stock market, and if you’re looking for places to short the market, Q.ai’s deep learning algorithms have used Artificial Intelligence (“AI”) technology to identify the Top Shorts today.

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Alliance Data Systems Corp (ADS)

The first company on the Top Shorts today is Alliance Data Systems Corp with AI-based factor scores of C in Technical, D in Growth, F in Momentum Volatility, and D in Quality Value. The company was born of the 1996 combination of a J.C. Penney transaction-processing operation and The Limited’s credit card bank business. With headquarters in Plano, Texas, Alliance provides marketing, loyalty program, and private-label credit card services. The stock has suffered this year during the pandemic, losing 61.6% for the year. Revenue was $5581.3M in the last fiscal year, which compares to $5474.7M three years ago. Operating Income was $1058.4M in the last fiscal year, versus $1228.3M three years ago. EPS was $5.46 in the last fiscal year, much less than the $14.1 three years ago. ROE was 29.21% in the last year, versus 43.79% three years ago. The stock is currently trading with a Forward 12M P/E of 5.52.

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Corepoint Lodging Inc (CPLG)

Next on the Top Short list today is Corepoint Lodging Inc, which is a company that is a lodging real estate investment trust strategically focused on serving the midscale and upper-midscale select-service lodging segments. The company’s portfolio includes over 300 hotels with around 40,400 rooms in locations in or near employment centers, airports, and major travel thoroughfares. The stock is down 50.28% for the year as travel spending has plummeted, and our AI systems have identified factor scores of D in Technical, C in Growth, C in Momentum Volatility, and F in Quality Value. Revenue was $812.0M in the last fiscal year, which compares to $836.0M three years ago. Operating Income was negative, though, coming in at $(65.0)M in the last fiscal year, compared to $91.0M three years ago. EPS was $(3.71) in the last fiscal year, versus $2.6 three years ago. ROE was (18.17%) in the last year, much worse than the 20.59% three years ago. Forward 12M Revenue is expected to grow by 9.14%.

Expedia Group Inc (EXPE)

Next on the Top Short list is Expedia Group Inc, with AI-based factor scores of B in Technical, F in Growth, F in Momentum Volatility, and F in Quality Value. The stock is down 17.91% for the year, impressive considering how much of its business relies on travel. The company is the world’s largest online travel agency by bookings, offering services for lodging (70% of total 2019 sales), air tickets (7%), rental cars, cruises, in-destination, and other (14%), and advertising revenue (9%). As for the financials, Revenue was $12067.0M in the last fiscal year, which compares to $10060.0M three years ago. Operating Income was $961.0M in the last fiscal year, compared to $626.0M three years ago. EPS was $3.77 in the last fiscal year, better than the $2.42 three years ago. ROE was 10.19% in the last year, up from 6.28% three years ago. Forward 12M Revenue is expected to grow by 15.39%.

Hollyfrontier Corp (HFC)

Moving down the Top Shorts list is Hollyfrontier Corp with factor scores from our deep learning algorithms of D in Technical, F in Growth, D in Momentum Volatility, and C in Quality Value. The stock has not done well this year, down 51.39%, and our AI systems think it is headed lower. The company is an independent petroleum refiner that owns and operates five refineries serving the Rockies, midcontinent, and Southwest, with a total crude oil throughput capacity of 510,000 barrels per day. As for the financials, revenue grew by only 0.13% over the last three fiscal years to $17486.58M in the last fiscal, compared to $14251.3M three years ago. Operating Income was $1457.33M in the last fiscal year, which compares to $950.18M three years ago. EPS was $4.61 in the last fiscal year, about flat when compared to $4.52 three years ago. ROE was 13.45% in the last year, versus 15.74% three years ago. Forward 12M Revenue is expected to grow by 2.11%.

Performance Food Group Co (PFGC)

Our final Top Short today is Performance Food Group Co with AI-based factor scores of C in Technical, D in Growth, F in Momentum Volatility, and D in Quality Value. The stock has struggled this year, down 51.39% overall. The company is the third-largest U.S. food-service distributor, with 7% market share and a heavy presence along the Eastern seaboard, the Southeast, and the Midwest. PFG’s food-service business (69% of pro forma sales) has its largest exposure to national and regional restaurant chains (52% of segment revenue), followed by independent restaurants (27%), and other channels (20%) such as retail, hospitality, and education. As for the financials, revenue was $25086.3M in the last fiscal year, which compares to $17619.9M three years ago. Operating Income was $142.1M in the last fiscal year versus $253.5M three years ago. EPS was $(1.01) in the last fiscal year, worse than the $1.9 three years ago. ROE was (6.9%) in the last year, much less than the 19.28% three years ago. The stock is trading with a Forward 12M P/E of 31.34.

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