Investors See Problems With Our Small-Cap Drone Name
Short interest is growing in Ondas as it prepares for increased defense spending.
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Portfolio holding Ondas Inc (ONDS), already carrying sizable short interest, has seen that interest grow of late. Is that positive? It can be a trading positive, if there is a squeeze and if traders catch that squeeze.
However, this is also often a sign that investors see problems at the company. We already know that Ondas has spent a great deal, through acquisitions, getting itself in position for an expected increase in defense spending on drones and unmanned systems here in the U.S. and across the NATO alliance.
Short positions now represent roughly 42% of the ONDS float, or $1.89 billion, according to S3 Partners, which was reported on at Seeking Alpha on Tuesday morning. That number would be up from 40.65% just two weeks ago, up from 33.84% in mid-April and up from just 15.47% in mid-March. S3 Partners was quoted in the piece commenting:
“ONDS has one of the highest short interest percentages of any stock with more than $1B of short interest in the Nasdaq Composite.”
The commentary went on:
“With a very high short interest ratio, the crowded score is close to 90, meaning the squeeze score oscillates around that level. This means there is almost always (a) squeeze risk, even on a minimal positive return.”
Just an FYI: S3 Partners is a market-leading financial data and analytics firm. S3 is a recognized standard for real-time short interest data, securities financing rates and market sentiment analytics. With over $200 trillion in assets under intelligence monitored by its platforms, S3 Partners frequently serves as the primary data source for major financial news outlets like Bloomberg, The Wall Street Journal and CNBC.
Upcoming Portfolio Earnings
Rocket Lab (RKLB): After the closing bell on Thursday, September 3. Expected: Adjusted EPS of -$0.02 on revenue of $104.25 million.
Smith & Wesson Brands (SWBI): After the closing bell on Thursday, September 3. Expected: Adjusted EPS of -$0.05 on revenue of $98.7 million.
Other Portfolio News
Planet Labs (PL)
On Monday, Planet Labs announced that the firm’s Tanager-2 satellite and its 18 SuperDove satellites of Flock 4J have arrived at Vandenberg Space Force Base in California for their upcoming launch aboard the upcoming mission with SpaceX (SPCX). Will Marshall, co-founder and CEO of Planet Labs, said:
“This launch includes 18 SuperDoves that enable Planet’s daily scan mission, which underpins the AI-powered broad area solutions that are core to unlocking new markets, as well as Tanager-2, which is designed to double our hyperspectral capacity and halve revisit times to detect methane super-emitters and more as part of our project with Carbon Mapper!”
The Portfolio
The portfolio will continue to increase cash levels at this time. We’ll carry on with our reduction of exposure to Alto Ingredients (ALTO). The portfolio will likely, if the market does at some point offer us a bit of reprieve, have to reduce exposure to Planet Labs (PL). Perhaps on any move in response to this week’s earnings release. We’ll see.
Monday’s Intentions vs Actual Trades
Intention: Sell 5 shares of (RKLB) at or close to the last sale of $63.25
Actual trade: Sold 5 shares of RKLB at $63.64
Intention: Purchase 10 shares of SWBI at or close to the last sale of $12.95
Actual trade: Bought 10 shares of SWBI at $12.67
Tuesday’s Intention
Sell 100 shares of ALTO at or close to the last sale of $3.90
Current Positions
Long 200 shares of ALTO at $4.7224. Target price: $6.50. Last sale: $3.90.
Long 40 shares of (ASPN) at $5.23. Target price: $10. Last sale: $4.93.
Long 100 shares of (EVLV) at $5.7883. Target price: $8.50. Last sale: $5.14.
Long 100 shares of (OCUL) at $8.3545. Target price: $11. Last sale: $10.55.
Short one OCUL $11 September 18 call at $1.65, Last sale: $0.30.
Long 250 shares of ONDS at $8.3642. Target price: $12. Last sale: $7.43.
Long 55 shares of PL at $24.1931. Target price: $33. Last sale: $19.49.
Long 5 shares of RKLB at $77.936. Target price: $97. Last sale: $62.24.
Long 100 shares of (SOFI) at $15.8511. Target price: $24. Last sale: $17.67.
Short one SOFI $22 November 19 call at $1.20. Last sale: $0.72.
Long 70 shares of SWBI at $14.9645. Target price: $19. Last sale: $13.01.
Long 100 shares of (VELO) at $12.2986. Target price: $18. Last sale: $11.59.
Cash: $424.46.
Portfolio Value: $9,946.44, -0.5% from inception on March 24.
At the time of publication, Guilfoyle was long ALTO, ASPN, EVLV, OCUL, ONDS, PL, RKLB, SOFI, SWBI and VELO.
