Netflix, Inc. (NASDAQ:NFLX) is the 44th most shorted stock on the NASDAQ 100 component, on the basis of “days to cover,” replacing Dollar Tree, Inc. (NASD: DLTR), which is now at number 58 in the list, says recent data from Nasdaq.
Netflix has higher “days to cover”
The “days to cover” at 08/15/2013 was 2.81 for Netflix, Inc. (NASDAQ:NFLX), and 2.18 for DLTR as against all NASDAQ 100 component of 4.27. Days to cover is an important metric as it takes into account both the total shares short and the average daily volume of shares being traded. After this total shares shorted is compared to average daily volume to find out the total number of trading days that will be required to close out all of the open short positions if every share traded represented a short position being closed.
A stock that has higher high “days to cover” value is believed to have more short interest. Shorting on a particular stock means that short sellers are using the stock as a hedge to buy some other stock. The other possibility could be that short sellers are assuming price to come down.
Hedge funds ‘bearish’ on Netflix
Hedge funds, on the other hand, are also not very optimistic about the stock. At the end of the second quarter, Netflix, Inc. (NASDAQ:NFLX) was in 43 hedge funds portfolios, as tracked by InsiderMonkey, which is a change of -10 percent from the previous quarter.
Icahn Capital Management, managed by Carl Icahn, held the largest position for a total of $1.1697 billion, amounting to 5.4 percent of its 13F portfolio. Apart from Icahn Capital, Coatue Management managed by Philippe Laffont held a $225 million position; the fund has 2.5 percent of its 13F portfolio invested in the stock.
Some of the hedge funds that dropped Netflix, Inc. (NASDAQ:NFLX) during the quarter are Daniel Benton’s Andor Capital Management and Renaissance Technologies.
Analysts also share similar thoughts
The Street analysts maintained a Hold rating on Netflix, Inc. (NASDAQ:NFLX) in a research note published on August 21. Another analyst firm, Robert W. Baird, started tracking Netflix setting a Neutral rating on the stock with a price target of $263, in a research note published on August 8. Zacks analysts assigned an Outperform rating to the stock with a price target of $290.00 in a research note published on July 25.
Overall, Netflix has an average rating of Hold and an average price target of $225.01.