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A Dead Cat Bounce Off the Postal Meter?

As part of the brilliant Wall Street Journal article and statistical package on the massacre among short sellers so far in 2013, we learn that heavily-shorted stocks at the beginning of the year have in many cases beaten the market and beaten to a bloody pulp the poor money managers who bet on the companies to crumble.

Among the unlikely-seeming 2013 rallies is Pitney Bowes (PBI), which according to the Journal had a stunning 31% of its shares shorted at December 31, 2012, and yet has soared in trading this year, crushing the S&P 500:

PBI Chart

PBI data by YCharts

We’ve written about Pitney Bowes with some regularity in recent years. Its super-fat dividend yield, and until recently its reliably-rising dividend, recommended it to investors even as the market for postal meters goes, well, the way of the U.S. Postal Service.

PBI Dividend Chart

PBI Dividend data by YCharts

In June, we wrote a mildly-positive article about Pitney Bowes; in truth the nicest thing we had to say was that the new CEO at least seemed to appreciate how screwed up things were (but, of course, that’s the first step in fixing problems).

Broadening the product line, cutting costs, making sense of a barrage of small acquisitions made in recent years – all of these must occur with urgency for Pitney Bowes to prosper again.

PBI PE Ratio TTM Chart

PBI PE Ratio TTM data by YCharts

That said, the doomsday PE ratio that was flashing earlier this year was just too tempting for many investors, especially those looking for dividend income. So, the shorts got hammered. They may yet be right.

As we reported earlier, the Journal's analysis showed stunning rise in heavily-shorted stocks like Questcor Pharmaceuticals (QCOR), Deckers Outdoor (DECK), Zillow (Z) at 36%; and Herbalife (HLF).

Jeff Bailey, The Editor of YCharts, is a former reporter, editor and columnist at the Wall Street Journal and New York Times. He can be reached at editor@ycharts.com. Read the RIABiz profile of YCharts. You can also request a demonstration of YCharts Platinum.

Read more articles about: Company Analysis  short sellers   money managers   

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