Top Stock Picks for 2021: Stitch Fix

SFIX could be another short squeeze candidate

Senior Vice President of Research
Jan 29, 2021 at 8:00 AM
facebook X logo linkedin


Every day for the next two weeks, we're going to highlight one of Schaeffer's top 14 picks for 2021. Up today is an e-tail stock with massive short squeeze potential; sound familiar? To access the entirety of the 2021 report, click here.

After a brief stint below its 2015 initial public offering (IPO) price of $15 earlier this year, it seems that investors are finally coming around to Stitch Fix’s (NASDAQ:SFIX) somewhat novel business model. In fact, Wall Street seems to have embraced the online personal shopping service amid the pandemic, as the company became more efficient in meeting first-time customers’ needs. The stay-at-home staple’s better-than-expected earnings report in early December also helped highlight this recently improved operating efficiency, and investors responded in turn. In fact, SFIX is now trading at nearly four times its IPO price, and more than double its 2019 close.

Despite the company’s obvious ability to prove itself, some still aren’t convinced. Of the 16 analysts covering SFIX, eight consider it a "hold" or worse, presenting plenty of upgrade opportunities as the equity continues to climb. Meanwhile, short interest continues to cling close to its late-2019 levels, though short sellers may be ready to jump ship soon, possibly triggering a a short squeeze. Currently, the 21.25 million shares sold short make up a massive 42.7% of the stock’s available float, and would take almost seven days to cover, at SFIX’s average daily pace of trading.

Stitch Fix (NASDAQ:SFIX) Stock Pick for 2021

An unravelling of bearish bets in the options pits could have a similar effect. This is per the equity’s SOIR of 1.66, which stands higher than all other readings from the past year, suggesting short-term options traders haven’t been more put-biased during the past year.

Todd is the Senior Vice President of Research at Schaeffer's Investment Research and has been with the research firm since 1993. Mr. Salamone is a graduate of The Ohio State University with a double major in finance and insurance and risk management. He has over 25 years of options trading experience, emphasizing technical and sentiment analysis in his equity, broad market and sector research. Mr. Salamone is the author of Schaeffer's Monday Morning Outlook, and he has been interviewed on CNBC, Bloomberg Television, Fox Business Network and quoted in several national media outlets such as The Wall Street Journal, Reuters, the Associated Press and others. Todd has trained tens of thousands of traders to be successful options traders.

 

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