One of the five most heavily shorted stocks in the S&P 500 could spell opportunity for contrarian-minded investors.
"We like Discovery," Erin Gibbs, equity chief investment officer at S&P Global, said Thursday on CNBC's "Trading Nation." "We think they are a transitioning company, we do see some potential earnings growth going forward and valuations really are at three-year lows [and have been] very stable, so we really see this as a good buying opportunity for where they are."
Gibbs points out that while the core cable television business has serious secular headwinds, Discovery is "expanding their revenue base" by building a theme park in Costa Rica, partnering with Sony to offer access to its channels on PlayStation's over-the-top television service and integrating European sports network Eurosport, which it fully acquired in 2015.
Of the five names with the highest short interest as a percentage of their available shares, Discovery is the only one that is up on the year. Topping the short-interest list is Under Armour, which has lost a third of its value this year thanks to disappointing earnings results and the departure of its chief financial officer.