Yeah, I like the article when it mentions E*Trade in passing, again, secondary to Knight:
Like Knight, E*Trade is heavily stacked with shorts ? 30 million shares, at last count. To compare, the stock's average daily trading volume is two-thirds lower, at 9.8 million shares. The company doesn't have Knight's attractive P/E ratio (E*Trade's losses are where its earnings should be). But in terms of revenues, this leading consumer-oriented online brokerage is almost modestly valued. Chase H&Q's Smith likes to look at the total market cap divided by the total revenues expected for this year. E*Trade comes out a bit below its peers' mean and average. E*Trade is valued at 3.9 times this year's revenues, while Chase H&Q's grouping of electronic brokerages weighs in at 4.3 times (mean) and 4 times (average).
Let's see, E*Trade's points:
1) does not have an attractive P/E ratio like Knight...
2) modestly valued based on price-revenue (gee, so undervalued at 3.9 versus 4.3 for everyone else - a 10% bargain which translates into a $2 rise stock price!)...
So there is no reason for the shorts to cover. Without a fundamental reason for shorts to cover, all this dream of a short squeeze is just a pipe dream.
NITE may be a powder keg in the making, but EGRP shorts are safe these days, even in a day of a NAZ super-rally (like today). |
