Fortunes were made and earlier this month when a massive short
squeeze propelled DryShips Inc. (NASDAQ: DRYS) from under $4 to above $100 and then back below $7 lost in a matter of
days.
Traders looking for the next big short squeeze are watching furniture stocks closely on Tuesday. Heavily-shorted stocks
Pier 1 Imports Inc (NYSE: PIR),
Restoration Hardware Holdings Inc (NYSE: RH)
and Williams-Sonoma, Inc. (NYSE: WSM) were all
up more than 2.3 percent on Tuesday.
Seasonality, Commentary
A number of furniture stocks were hit hard following late-October commentary from the CEO of La-Z-Boy
Incorporated (NYSE: LZB) about the challenging
environment ahead.
“In light of the weaker demand throughout the retail home furnishings sector, we anticipate sales for the fiscal 2017 second
quarter to be 1.0 percent to 2.5 percent lower than last year’s second quarter sales of $382.9 million,” CEO Kurt Darrow said.
Traders have made large short bets on the three stocks showing strength on Tuesday. According to shortsqueeze.com, Pier 1 has a short percent of float of
21.7 percent. Restoration Hardware’s short percent of float stands at 39.5, while Williams-Sonoma’s sits at 23.9.
In the past month, all three stocks have burned short sellers badly. The three stocks are up between 16.6 and 32.2 percent.
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