We recently released a list of 20 Stocks Laggards That Have Attracted Bearish Investors In this piece, we will examine how Advance Auto Parts, Inc. (NYSE:AAP) measures up against other lagging stocks that have attracted attention from short sellers.
Short interest indicates the proportion of readily accessible shares that have been sold with the expectation of buying them back later at a lower price. This metric serves as a gauge for numerous investors to assess the strength of negative sentiments towards a company. Given the characteristics of short selling, this figure has gained popularity amongst investors as a key indicator.
It garners significant attention because individuals who bet against a stock typically conduct thorough investigations and firmly believe in the company's potential collapse. Since these traders expose themselves to limitless risks, major financial players or savvy investors selling stocks short attract considerable focus. These stakeholders often investigate possible warning signs that might have led to increased short interest.
We opted to delve deeper and uncover where savvy investors anticipate future difficulties. For compiling our roster of 20 stocks expected to lag behind due to bearish bets, we examined the poorest performing equities over the past half-year before sorting them according to their level of short selling activity.
A production plant floor brimming with a variety of automotive components and fittings.
Advance Auto Parts, Inc. (NYSE:AAP)
Short interest: 15.36%
6 months’ performance: -11.35%
Advance Auto Parts, Inc., identified by the stock symbol NYSE:AAP, functions as a supplier of automotive aftermarket components. The company offers items such as brakes and brake pads, batteries along with related accessories, exhaust systems and their parts, radiators alongside cooling system pieces, steering and alignment materials, belts and hoses, plus various additional goods.
Advance Auto Parts (NYSE:AAP) notably bolstered its fiscal standing during the most recent quarter by amassing $1.87 billion in liquidity. The firm slashed its net debt from $3.8 billion in the third quarter of 2024 down to $1.8 billion, thereby reinforcing the robustness of its balance sheet. Furthermore, the corporation embarked on a restructuring effort to shutter around 200 standalone outlets and 500 corporate branches. This strategic move aims to achieve cost savings between $60 and $80 million each year.
Despite all these positives, there are no short-term catalysts for the company’s investors. Based on the guidance, Q1 does not seem encouraging. The firm expects about a 2% decline in same-store sales. The reality could be even worse for the company as tough macro conditions, coupled with a poor environment for auto stocks, are set to deal a double blow.
Overall, AAP ranks 14th on our list of underperforming stocks targeted by short sellers. While we acknowledge the potential of AAP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AAP but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock .
READ NEXT: 20 Top AI Stocks You Should Consider Purchasing Today and 30 Top Stocks to Purchase Currently as Recommended by Billionaires .
Disclosure: None. This piece was initially published at Insider Monkey .
Posting Komentar
Posting Komentar