5 Consumer Stocks to Short
Michael Shulman, June 17, 2009
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Stock to Short #4: Ruby Tuesday (RT)
While I've got to admit that they have great ribs (although the salad bar needs a bit of work), this restaurant chain may be a dead man walking. Ruby Tuesday (RT) went up-market just as the recession hit. At the end of February, cash plus receivables was $39 million, accounts payable and short-term debt was $105 million, and profits were $4 million. Need I say more? Why not? RT also has half a billion in long-term debt.
The stock has bounced from a buck and change to more than $6. I think it's headed back to a buck. Wait for the stock to break down below its 50-day moving average, and then move in for the kill with put options.
Find out how I led my ChangeWave Shorts subscribers to a total gain of more than 500% shorting Ruby Tuesday.
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