3 Stocks to Short Right Now


Think the market is on the verge of collapse? Here are 3 stocks that Mastery believes are due for a pullback.

They are Garmin (GRMN), Coinstar (CSTR) and Boston Beer Co. (SAM).

Let's kick it off with Garmin (GRMN).

Shares of GRMN are up 27% in the last 52 weeks. We believe the move up is not justified, since everyone with a smartphone has GPS these days. In their last earnings call, which was touted as "Garmin Has Good Quarter" , we think it was anything but a good quarter. They may need a small loan.

Garmin's first-quarter revenue of $556.6 million was down 38.8% sequentially on seasonality. The Auto/Mobile segment was down 51.8% sequentially and up 5.6% year over year. The increase from the year-ago quarter was driven by share gains in PNDs, stronger automotive sales and recognition of previously deferred revenue. However, pricing was stronger than the fourth quarter of 2010.

The only thing Garmin has going for them are their Outdoor, Fitness, and Marine segments. They are facing fierce competition and their PND business is in a secular decline.

If the market keeps falling, we think Garmin could easily drop back into the $30 range.

Over the past 12 months Garmin Ltd (GRMN) shares have traded between $29.23 and its 52-week high of $50.67.  Garmin Ltd shares are now trading with a P/E Ratio of 17.2 and EPS of 2.63.

Coinstar (CSTR) is actually a stock we really like in the long term. However, shares are up 30% ytd and look to be on the verge of collapse. Looking for a quick drop to the lower $50's and then an exit of the trade.

Over the past 12 months Coinstar Inc (CSTR) shares have traded between $37.43 and its 52-week high of $69.74.  Coinstar Inc shares are now trading with a P/E Ratio of 12.5 and EPS of 4.65.

Shares of Boston Beer Co. (SAM) are flat YTD but up 27% in the past year. SAM is another company that we don't necessarily dislike, but presents opportunity to short as it trades near all time highs and has some overhead resistance. Shorts are already targeting the stock, as the float is currently 35% short. We're looking for a quick drop to $95 if the market cooperates. But beware of a short squeeze when trading SAM.

Over the past 12 months The Boston Beer Company Inc (SAM) shares have traded between $71 and its 52-week high of $115.49.  The Boston Beer Company Inc shares are now trading with a P/E Ratio of 21.2 and EPS of 5.09.

Garmin got smashed today, down -9%. Getting closer to the price target of $30 from a month ago. The funny part about it is it's down because of the release of Apple Maps. Did people not realize Garmin is obsolete already because of Google Maps?

I like how Cessna and Lear both annouced that their latest and greatest aircraft will use Garmin avionics, yet this article makes no mention of that. Research much?

That news was announced after this article was posted.BTW, check out the megaphone top formation in the GRMN chart!

For short positions I look for poor companies, not strong ones. The article does not mention Garmin's zero debt, nice dividend, and agressive stock buyback program. What about its increasing dominance in the aviation sector? Garmin is a very soild company. I don't see them going down past the current market correction. 

You are fooling yourself if you think Garmin is a strong company. How about its decreasing revenues which will lead to less dividends as they run out of cash?

JPM going down the toilet, suprised the stock is still trading in the $30's!

Thanks for pointing that out, shorting JPM sounds like easy money right now!