ABOUT CHANOS SHORT RESEARCH
Established in 1994, Chanos Short Research provides multi-sector short fundamental equity research primarily on U.S. equities. More specifically, Chanos Short Research looks for Overvaluation, Frauds, Fads, Financial Accounting Irregularities, Highly Leveraged, Negative Cash Flow, Low Short Interest stocks with Market Caps of over $1 billion.
LEADERSHIP
Thomas Chanos
Managing Director
Mr. Thomas S. Chanos is the president, director of research and research analyst at Chanos Short Research. Prior to founding the firm in May 1996, he was a financial consultant at A.G. Edwards and Sons, Inc., from 1986 to 1996. He started his investment career in 1981. Mr. Chanos obtained a B.A. in Economics from the University of Wisconsin in 1986.
METHODOLOGY
With over 30 years’ experience identifying short opportunities, Chanos has developed a proprietary investment methodology for shorting. Some of his key criteria include:
ASYMMETRIC RISK PROFILE
The Street’s consensus target price for the bull story is not very high, but Chanos’s analysis shows a much lower target.
FIND THE FADS
The life cycle of a fad is often repeated: A product with a limited market, but maximum publicity; TAM overinflated based on early growth numbers; Street extrapolates sales numbers while rate of growth is slowing; and anecdotal publicity not backed up by the numbers.
HIGH MARGIN CONSUMER PRODUCTS WITH NO MOAT
A high-margin product sounds like a good basis for a business. But if this product is “made in China” – beware: Competitors will enter fast, and margins will plummet.
MARKET TIMING
Chanos Research’s senior analyst has a decade of experience as a retail broker. As such, Chanos understands how unsophisticated retail investors can push stocks up, believing the hype. This momentum can last for a few years. Best to wait until risk/reward is in your favor. Chanos’s shorts realize their price targets within 6-12 months.
TAKE MONEY OFF THE TABLE
Chanos Research guides clients on when to remove risk and book a profit by closing positions fully or partially.
ADDING TO POSITIONS
Chanos has a successful track record of guiding clients as to when to add to short positions, increasing returns from one idea.
IDENTIFICATION OF CATALYSTS
There are several indicators which successfully predict when lower guidance announcements are likely to occur. For example: dramatic sale prices which are not yet in the Street’s earnings estimates; or identifying outlier y/y numbers that are hard to beat.
INDEPENDENCE
Chanos Short Research is aligned with you, our buy-side client, and our independence allows us to make bold calls when warranted.
SERVICES
Reports – Chanos Short Research offers fundamental Independent long and short U.S. equity research for hedge funds and institutions
Meetings & Conference Calls with Chanos Short Research’s Senior Analyst as required.
COMPANIES
| Current and Previous Shorts | |
|---|---|
| PTON | Peloton Ltd |
| IRBT | iRobot |
| TSLA | Tesla |
| SFLY | Shutterfly |
| HOG | Harley-Davidson |
| COST | Costco Wholesale |