eBay, Angie's List Buck Short Interest Trend In Social Media (ANGI, EBAY, ZNGA)
Among the social media companies based in the United States, Angie's List (NASDAQ: ANGI) and eBay (NASDAQ: EBAY) saw significant upswings in short interest between the July 31 and August 15 settlement dates.
They bucked the trend, though.
Short interest in Facebook (NASDAQ: FB), Google (NASDAQ: GOOG), Groupon (NASDAQ: GRPN), LinkedIn (NYSE: LNKD), Pandora (NYSE: P), Shutterfly (NASDAQ: SFLY), United Online (NASDAQ: UNTD) and Yelp (NYSE: YELP) declined in that time.
Zynga (NASDAQ: ZNGA) saw the largest decline in the number of shares sold short in the first two weeks of August. Below we take a quick look at how Angie's List, eBay and Zynga have fared and what analysts expect from them.
In addition, note that the number of U.S.-listed shares (or ADRs) sold short of Chinese social media company Baidu (NASDAQ: BIDU) also shrank, while those in Renren (NYSE: RENN), Sina, (NASDAQ: SINA) Sohu.com (NASDAQ: SOHU) and YouKu Todou (NYSE: YOKU) grew to mid-August.
Short interest in this Indianapolis-based operator of online review sites increased more than 16 percent to about 13.59 million shares in early August. That was the highest number of shares sold short in at least a year and was about 33 percent of the float. The days to cover rose to about 15.
The company announced the acquisition of online start-up SmartHabitat in early August. Angie's List now has a market capitalization of more than $1 billion. The long-term earnings per share (EPS) growth forecast is about 46 percent. However, the operating margin is in negative territory.
The consensus recommendation of the analysts who follow the stock and were surveyed by Thomson/First Call is to buy shares. The mean price target, which is where analysts expect the share price to go, is about 30 percent higher than the current share price and would be a new multiyear high.
Note that the share price has retreated about 15 percent in the past month, after reaching a 52-week high in mid-July. But it is still up more than 66 percent year to date. Over the past six months, the stock has underperformed competitor Yelp, but outperformed the Nasdaq and the S&P 500.
Short interest in this San Jose, California-based online commerce company increased by almost 12 percent to more than 15.92 million shares during the period, or more than one percent of the float. That was the largest number of shares sold short in at least a year. Days to cover was about two.
eBay has a market cap of more than $65 billion, but it does not offer a dividend. It is expected to post double-digit revenue growth in the current quarter and the next. The long-term EPS growth forecast is about 15 percent, but the price-to-earnings (P/E) ratio is about 25. The return on equity is less than 13 percent.
Of the 40 analysts polled, 34 recommend buying shares, 14 of them rating the stock at Strong Buy. The think shares have room to run, as the mean price target is about 20 percent higher than the current share price. That target would be a new multiyear high.
The share price has ridden support at $50 since December, challenging $58 on a handful of occasions. Over the past six months, the stock has underperformed the likes of Amazon.com (NASDAQ: AMZN) and Overstock.com (NASDAQ: OSTK), as well as the S&P 500.
Short interest in the San Francisco-based online social games operator dropped more than 26 percent to around 30.65 million shares during the period, essentially erasing a similar rise in the number of shares sold short in previous period. It represented almost six percent of Zynga's total float.
The new CEO announced upper management changes in mid-August, including the departure of three executives. The company has a market cap of more than $2 billion. The long-term EPS growth forecast is about 30 percent, but the return on equity is in negative territory.
Only one of the 23 surveyed analysts recommends buying shares, while four rate the stock at Underperform. Hold has been the consensus recommendation for at least three months. However, the analysts' mean price target suggests more than 12 percent upside potential.
The share price has retreated about seven percent in the past month but still is up more than 16 percent from the beginning of the year. Over the past six months, the stock has underperformed Electronic Arts (NASDAQ: EA) and Facebook, as well as the broader markets.
At the time of this writing, the author had no position in the mentioned equities.
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