Pro Strategy: Fitbit may outrun the shorts

Michael Steinhardt
Scott Eells | Bloomberg | Getty Images
Michael Steinhardt

Editor's note: Pro Strategy is a column on how to use the strategies of the smartest minds on Wall Street to generate quality investment ideas.

Fitbit is heavily shorted and one of the worst performing names this year. Using a legendary hedge fund manager's investing framework may point to the plunge as an opportunity.

Shares of the wearable device maker are down more than 50 percent in 2016 due to market worries that it will falter like another once-hot wearable tech stock, GoPro. Data accuracy questions and Wall Street's disappointment on first quarter guidance are also weighing on shares of FitBit.

CNBC Pro evaluated Fitbit's prospects through the use of Michael Steinhardt's "variant perception" investing framework. Comments from Fitbit management and Citron Research's Andrew Left also helped shape this outlook.

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