Thoughts on AN and ZLC

AN and ZLC share at least one common element: the stock prices remain strong.
They also have in common the fact that they are consumer product companies at a time when the consumer is belt tightening.
For example, Auto sales are down to 16 year lows, but somehow AN remains hardly affected.

The answer lies in something beyond fundamentals.

AN enjoys the benefit of one thing: a report that the Gates foundation has accumulated a position in them. That probably has shorts running for cover.

ZLC is a different beast altogether.

I am just completely blown away here. What could be the possible reason for anyone to buy this stock?

• Overvalued – PE of 60 & a forward PE of 20.
• No Future Growth Opportunity – This isn’t Tiffanys: Zales sells to the working class. And they are not running to spend money in a downturn.
• Falling sales – The hundreds of stores being closed will boost EPS but hurt sales
• Falling profitability – Margins are <1%.

My conclusion: shorts are covering. 45% of available shares are shorted. The question is why are they covering.