Harmonic Inc. (NASDAQ:HLIT) Fighting the Shorts

Harmonic Inc. (NASDAQ:HLIT)

Harmonic Inc. (NASDAQ:HLIT) are trading near resistance levels and the short sellers are out. HLIT has a short float of 13.64% and a short ratio of 13.64. The short float is the numbers of shares held short divided by the number of shares in the float. The short interest ratio is defined as the short float divided by the average daily volume. It is also known as “days to cover”. Often used as a sentiment indicator, a value over five is often considered a bearish signal.

In September and October of 2016, HLIT shares briefly traded just over $6.00 before retreating below $4. Prior to that, in 2015 HLIT tried to hold above $6 from August through October before retreating back below $3. Currently HLIT is 3.75% below its 52-week high and has gained 17% in the past month, and is up 18% YTD.

On Tuesday, Harmonic Inc. (NASDAQ:HLIT) released their quarterly earnings and beat estimates. EPS was forecast at $0.06 and HLIT came in at $0.08. Revenues were posted at $113.1 million, besting analyst estimates by $5. Despite the good-looking figures, Q1 guidance was not as bright. The company is forecasting revenues between $87 and $95 million which is under the expected figure of $96.9 million.

Recent news includes an announcement today that that MLB Network has upgraded its existing Harmonic playout platform with a new software-based Spectrum™ X advanced media server system. Free PR such as this may allow shares of Harmonic Inc. (NASDAQ:HLIT) to breech the $6 resistance level and force some shorts to cover. But at the end of the day, it is about earnings and future growth. There is some strong sentiment that the company will not be a rising star, but if the market keep hitting new highs and Harmonic Inc. (NASDAQ:HLIT) keeps reporting financial news that is in-line or better than expectations, there could be a stampede of short covering.

3/1/2017
Ticker Symbol HLIT
Last Price a/o 4:43 PM EST  $                      5.90
Average Volume                    532,100
Market Cap (mlns)  $                  423.09
Sales (mlns) $379.40
Shares Outstanding (mlns) 78.35
Share Float (mlns) 76.16
Shortable Yes
Optionable Yes
Inside Ownership 2.70%
Short Float 13.64%
Short Interest Ratio 19.52
Quarterly Return 14.89%
YTD Return 8.00%
Year Return 61.19%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Author: Marcus Anderson

Marc has a degree in economics and a MSc. in Finance. Marc worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

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