It might be a rough year for hedge funds, with markets seemingly wandering ever higher into uncharted territory, but some eagle-eyed short sellers are still making money.
Short selling refers to borrowing a financial instrument to sell it, in the hope of buying it back later at a lower price. Europe has proved fairly infertile soil for short sellers, according to data provider Markit. Instead the company says the U.S. has been the place for some success, detailing the top 20 North American shorts so far this year.
"Materials, energy and software &services companies account for half of the top 20," Simon Colvin, the author of the report, said in a press release this week.
Colvin - concentrating on data in the first half of 2014 - has looked at the performance of companies since they recorded a fresh annual high in short interest. He believes that short sellers have been able to uncover plenty of underperforming shares over the last six months with the 20 best performing shorts falling by over 38.67 percent after their short interest hit an annual high.
Nii Holdings, a mobile communication services company that's listed on the Nasdaq, topped Colvin's list as the best performing short so far this year. It's been easy pickings for shorts after a 50 percent price drop in February as it released disappointing earnings and mounting losses in user subscriptions.