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The Importance Of Short Interest When Adding Dividend Growth Stocks To Your Portfolio
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Published Tue, 07 Aug 2012 10:00:08 -0400 on Seeking Alpha
There are many criteria that investors look at when selecting dividend stocks for their portfolios. Factors like P/E ratio, the moat of a firm, earnings growth, payout ratio, and dividend growth are all very important when determining whether or not to invest in a particular company. However, there is one factor that I believe is especially important for dividend stocks, and it is often overlooked by investors. This factor is the short interest of a stock. The short interest of a stock is an important issue to consider when selecting an investment because it indicates the existence of an additional pool of buyers, short-sellers, who could be forced to cover their short positions if the stock goes up and they begin to lose money on these positions. This effect can easily lead to a short squeeze, where a number of short-sellers looking to cover their positions are forced to bid... Read more


