Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

Forensic Accounting

<ul>
<li>This model seeks short-sale candidates among companies that use aggressive accounting and/or exhibit deteriorating quality of earnings.  </li>
<li>They are typically highly idiosyncratic shorts and require thoughtful analyses of upcoming catalysts.  When the company’s issues become well-known, there is often multiple compression as well as a rerating.</li>
<li>These shorts can have high or low betas, valuations based on artificial earnings and exhibit good short responses to subsequently disappointing earnings.</li>
</ul>


This model seeks short-sale candidates among companies that use aggressive accounting and/or exhibit deteriorating quality of earnings.  
They are typically highly idiosyncratic shorts and require thoughtful analyses of upcoming catalysts.  When the company’s issues become well-known, there is often multiple compression as well as a rerating.
These shorts can have high or low betas, valuations based on artificial earnings and exhibit good short responses to subsequently disappointing earnings.


Earnings Quality Short Candidates: CELH, FTCH, WOLF, WMG

United States

Warner Music Group Corp. records and publishes music. The Company offers music recording, merchandising, sponsoring, touring, and artist management services. Warner Music Group serves customers worldwide.

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Warner Music Group (WMG US)

Earnings Quality Short Candidates: CELH, FTCH, WOLF, WMG

Earnings Quality shorts lead to idiosyncratic alpha. Today, we show our model rankings and highlight CELH, FTCH, WOLF, WMG.

Eric Fernandez, CFA

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