By: Tomi Kilgore
Vijay Marolia, managing partner of multistrategy fund Regal Point Capital in Florida, told MarketWatch that Lumber Liquidators is one of his biggest short positions, not just because of the recent bad publicity, but also because its sales growth has been disappointing while inventories have been rising. A short position is a bet that the price of a stock will fall.
Including Lumber Liquidators’ fourth-quarter results that were reported on Feb. 25, the company has missed revenue expectations in four of the past five quarters, according to FactSet, while year-over-year inventory growth has increased in each of the past four quarters.
Under current market conditions, Mariolia said he wouldn’t even consider trimming his short position, “unless we get closer to $20.”