Q: Which stocks do investors expect to crash?
A: When the crowd at a baseball game doesn't like a batter, there's no hiding it. The audience's boos make it crystal clear who the crowd is betting against.
Investors, too, have their favorite stocks and the ones they're hoping will fail. But while there's no booing on Wall Street, investors can still find out which stocks investors are betting against.
The best way to find out which stocks are being bet against is a measure called short interest as a percentage of float.
Short interest is a measurement, provided by the stock exchange, of how many shares of a stock have been sold short, or bet against. The number of shares sold short is then divided by the number of shares that are freely traded, or the float. The result is percentage that tells investors what percentage of shares available for trading are being bet against.
Stocks might have high short interest for a variety of reasons, ranging from the belief the company's growth will slow or that the stock is overvalued.
And it's for a variety of reasons that the companies currently hit with the highest level of short interest are animal medicine maker Zoetis at 38% of float, followed by iron company Cliffs Natural at 36% and J.C. Penney at 36%.
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