Short Interest: 33%
Analyst Predicted Upside: 41%
Boutique chain Francesca’s (FRAN) has been an analyst favorite since it hit the market two years ago, but it’s been en vogue for shorts as well.
Most recently, William Blair initiated an “outperform” rating on the stock just a couple days ago, maybe thinking the 20% decline from late May to late June was just a tad overdone. And FRAN indeed looks cheap at current levels considering the chain’s big plans for expansion; the stock has a price/earnings-to-growth ratio of 0.87, indicating it’s somewhat undervalued.
Plus, at least a few short-sellers have already taken a hike since the stock’s recent big dip. More than 40% of the float was sold short at the very end of May — right before FRAN got pounded for a disappointing outlook — while 33% of the float is held short now.
Still, that chunk (and a short ratio of nearly 11) isn’t anything to sneeze at and could easily lead to a short squeeze if FRAN’s recent rebound continues.