Dividends4Life: Short Sellers Are Wary of These Dividend Stocks

Short Sellers Are Wary of These Dividend Stocks

Posted by D4L | Wednesday, November 07, 2012 | | 0 comments »

It’s easy to get caught up in the momentum. But before leaping into a rallying stock, hoping to enjoy even more upside, it’s wise to acknowledge the naysayers. In this case, we look at rallying dividend stocks with increased pessimism from short sellers. All stocks in the list below have met the following criteria: Market cap above $300 and rapidly growing: Share price is rallying above its 20, 50 and 200 day moving averages (MA). This is an incredibly bullish technical indicator that says the stock is running strong, and may have some more upward momentum to price in. Dividend yields between 3%-8%, a relatively sustainable high yield range.

To find signs their rally may be coming to an end, or even reversing, we look to short sellers for a healthy dose of pessimism. Short sellers benefit when share price falls. Their collectively increased short positions on a stock indicates a belief that there is more downside than upside to price in. For this list we screen for increased shorting month over month: Colony Financial, Inc. (CLNY), SouFun Holdings Ltd. (SFUN), Nacco Industries Inc. (NC) and American Greetings Corp. (AM).

Source: Kapitall Wire

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