Shorting VIC (ValueInvestorsClub.com), PRXI, PVG

Occasionally, I find myself shorting long ideas that are written up on VIC (ValueInvestorsClub.com).  VIC is an exclusive website where a mix of professional money managers and non-Wall Streeters post investment ideas.  Non-members like myself can sign up for a guest account and see ideas with a 45-day delay.

Here are situations where I have taken the opposite side of their trades.

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Miller Energy Resources (MILL) – This company is awful

Miller Energy is an independent exploration and production company that is mostly involved in breathing new life into old oil and gas assets.  It has many of the characteristics of an ideal short:

1. The company has been very unprofitable over the past several years.  In most years the company was GAAP unprofitable.
2. The company likely will not make money in the future.
3. The company has debt (some at 18%) so the short thesis will play out faster.
4. Insiders are overpaid.
5. The company trades at a large premium to the market value of its assets.

Unfortunately, I am not the only person in the world that thinks this stock is a great short.  Roughly 29.2% of the float is sold short and the interest on the borrow is roughly 5%.