High Short-Interest Furniture Stocks Outperforming Strongly Tuesday

Fortunes were made and earlier this month when a massive short squeeze propelled DryShips Inc. DRYS from under $4 to above $100 and then back below $7 lost in a matter of days.

Traders looking for the next big short squeeze are watching furniture stocks closely on Tuesday. Heavily-shorted stocks Pier 1 Imports Inc PIR, Restoration Hardware Holdings Inc RH and Williams-Sonoma, Inc. WSM were all up more than 2.3 percent on Tuesday.

Seasonality, Commentary

A number of furniture stocks were hit hard following late-October commentary from the CEO of La-Z-Boy Incorporated LZB about the challenging environment ahead.

“In light of the weaker demand throughout the retail home furnishings sector, we anticipate sales for the fiscal 2017 second quarter to be 1.0 percent to 2.5 percent lower than last year’s second quarter sales of $382.9 million,” CEO Kurt Darrow said.

Traders have made large short bets on the three stocks showing strength on Tuesday. According to shortsqueeze.com, Pier 1 has a short percent of float of 21.7 percent. Restoration Hardware’s short percent of float stands at 39.5, while Williams-Sonoma’s sits at 23.9.

In the past month, all three stocks have burned short sellers badly. The three stocks are up between 16.6 and 32.2 percent.