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The new Big Shorts

5 stunning stats about Whole Foods

The market has been pretty volatile for the past week — but the Dow, SP 500 and Nasdaq are still not far from their all-time highs. So it shouldn’t be a huge surprise that short sellers, who bet that stocks will go down, are starting to become more active too.

Anytime the market is near a peak, investors question valuations. And short sellers often target stocks that have gone up a lot relatively quickly.

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They’re essentially following one of Newton’s famous laws of physics — to every action there is an equal and opposite reaction. In other words, what goes up must come down.

Here’s a quick tutorial on short selling. Investors borrow a stock and sell it, with the hopes of buying it back at a lower price and pocketing the difference. So the more a stock goes down, the cheaper it becomes to repurchase it and return it to the lender.

Shorts often wind up noticing bad news before the rest of the market, just like Steve Eisman, the hero of the book “The Big Short” about the subprime mortgage crisis. (His name was changed to Mark Baum in the movie.)

But many short sellers have been focusing their attention on stocks that have already been pummeled. These bearish investors must believe that the worst is not over yet.

Bet against Oprah? Ihor Dusaniwsky, head of research for S3 Partners, a financial analytics firm that tracks short selling, said two current favorites of short sellers are Weight Watchers (WTW) and Whole Foods (WFM).

Weight Watchers stock has already plunged more than 55% this year. It’s a bit curious since the company’s woes have already made a lot of short sellers rich.

But Weight Watchers has continued to struggle even though Oprah Winfrey bought a stake in it last year and has become its new celebrity spokesperson. The company’s CEO announced earlier this week that he will step down at the end of the month.

Related: Weight Watchers CEO quits after tumultuous year

“The surge in short selling of Weight Watchers surprised me a bit,” Dusaniwsky said. “I thought more investors would take profits and get out of that trade. But even in the past month, more are piling in.”

Shorting kale and quinoa. Whole Foods is another company that has done poorly this year. Shares are down 15%.

The company is still suffering from last year’s price-fixing scandal. Sales have been weak. There’s a lot of skepticism about the company’s newer urban stores that are targeting Millennial shoppers. And competition remains intense.

So it looks like investors still don’t have faith that the company can turn things around anytime soon.

“Kroger is hurting Whole Foods. The expansion plans are a challenge as well. And who wants to spend $6 a pound for apples?” Dusaniwsky said.

He was exaggerating a bit about the apples. A pound of Fuji apples at the Whole Foods closest to me costs just $2.49 a pound — but are currently on sale for $1.49. Still, the company’s Whole Paycheck reputation has lingered.

Close Sesame on Alibaba? So short sellers may be picking on stocks that are down. But they are targeting some big market winners too.

Chinese Internet giant Alibaba (BABA, Tech30) is up nearly 30% this year. And well-known hedge fund manager Jim Chanos has talked about Alibaba as a top short pick of his lately.

Related: Why Jim Chanos thinks Alibaba is shady

Dusaniwsky said he’s surprised that many investors are betting against Chanos, given his successful track record. Alibaba also faces a big challenge from Chinese social media giant Tencent (TCEHY).

Hey St. Jude. Don’t make it bad. Medical device company St. Jude Medical (STJ) is another hot company that has attracted the attention of more shots thanks to a prominent market bear.

Carson Block, who runs the research firm Muddy Waters, has recommended shorting St. Jude due to concerns he has about the company’s pacemakers and defibrillators, which he alleges can be hacked. (Didn’t that happen on “Homeland?”)

St. Jude is disputing the claims. It is suing Muddy Waters. And Dusaniwsky notes that even though the stock has fallen about 6% since the Muddy Waters report, it is still up more than 25% this year.

Shorts often do a great job of finding stocks that are due for a fall, especially if accounting fraud or other financial chicanery is involved. But they don’t have a perfect track record.

Twitter’s touchdown. Dusaniwsky said that short sellers may be giving up their attack on Twitter (TWTR, Tech30), for example.

The stock has rebounded sharply from the all-time lows it hit earlier this year. As a result, the level of short interest in the stock has decreased dramatically.

Related: Twitter’s NFL livestream scored a touchdown

Takeover speculation has helped boost the price. But Twitter has also gotten great press for some of its new streaming video efforts, particularly its partnership with the NFL to show Thursday Night Football games.

Last night’s debut, in which the New York Jets toppled the Buffalo Bills and former coach Rex Ryan, was a big success. The reviews were great and there were no major glitches. (But that’s little consolation for my wife, a diehard Bills fan.)

No worms in Apple stock. And it looks like short sellers may have made a mistake in betting against Apple before the iPhone 7 launch as well. Dusaniwsky said there was a notable increase in short interest in Apple in recent weeks.

But the strong pre-orders for the iPhone 7, coupled with Samsung’s battery woes, have helped push Apple’s stock up nearly 10% in the past week.

“Investors were pre-shorting Apple but consumers were pre-ordering the new iPhones,” Dusaniwsky said.

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