This Homebuilding Stock Could Be Ripe For a Short Squeeze

AV Homes stock is still heavily shorted, despite a recent round of covering

Managing Editor
Sep 15, 2017 at 2:55 PM
facebook X logo linkedin


Hurricane Irma has come and gone, leaving a trail of destruction in its wake. While insurance and restaurant stocks were on Wall Street's radar last week, homebuilding stocks are now focus as the cleanup effort gets underway. While options bulls have blasted home improvement giant Home Depot of late, AV Homes Inc (NASDAQ:AVHI) is an under-the-radar Florida homebuilder that could be be putting the squeeze on short sellers.

On Tuesday, AV Homes stock posted its largest one-day percentage gain since July 24, surging 4.8%. The stock is now up almost 13% from its Aug. 23 annual low of $14.65, trading above its 320-day moving average -- a trendline that served as resistance in early August, but could now be switching to a more supportive role. Below here is the $15.80 region, home to AVHI's year-to-date breakeven mark.

AVHI's rebound could get an assist, should some of the weaker bearish hands start to cover. Although short interest decreased 8% during the last reporting period, the 1.3 million shares still sold short represent nearly 12% of the AVHI's total available float. Furthermore, at AVHI's average daily trading volume, it would take over 11 days for shorts to fully cover their positions. This represents a major source of buying power that could provide tailwinds for the stock.

Analyst sentiment could also help nudge AVHI higher, as just two brokerages cover the stock  -- and both rate it a tepid "hold." This indicates that there is room for upgrades and/or positive initiations, should the stock extend its Irma-related bounce.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI