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Monday, July 10, 2006

Fortune on Hansen’s Fortunes

By William Trent, CFA of Stock Market Beat

The latest issue of Fortune Magazine has a brief story on Watch List member Hansen Natural’s (HANS) great run over the last couple of years (the company is splitting 4 for 1 today). It is mostly background but serves as a quick introduction to the name. It also highlights how the rise has attracted some bears.
What, exactly, could make a beverage stock rise 3,900%? - July 10, 2006

Hansen’s meteoric rise, however, has attracted plenty of professional skeptics. Short-sellers lured by its lofty P/E - the stock trades at 53 times trailing earnings - have flocked to the beverage company. Almost 20% of its outstanding shares have been sold short. But ironically the heavy shorting has helped keep the stock riding high in recent months. “There is no doubt,” says Canaccord Adams analyst Scott Van Winkle, “that when there are fewer shares out there floating because a good percentage are borrowed, it has a positive impact on the share price.”
It is tough to short any stock, particularly a fast-growing small-cap with a small share base. Not sure exactly what they are thinking on this one, but everybody’s got to make a living somehow.

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