I do not know who the largest shorters are, but most are pretty smart and they keep shorting more MHK up at these levels...I do know the larger longs and they are pretty smart too (Fairholme, Ruanne Cunnif, Weitz)....my valuation for MHK is $115 to $125 per share and no matter what I do realtistically to the numbers, I cannot get less than this valuation....I have known this business for years and have owned it once before, so I am pretty comfortable with my valuation even with the changes in the business mix and the new leverage......however, if you asked me where I thought the stock was going, it would be lower in the short term (to the mid 60's) as short term earnings will be below expectations.....and much higher over the next three years, as growth from the lower base will far exceed expectations....so, unless we have a buyout or other takeout, this is my best efforts on where things are going....personally, I own 60% of what I want to own at $68 and will wait to see if I have a shot at buying the balance sometime in the next few months
What is your reasoning for the recent increase in price? MHK has plans to purchase hard surface competition, and whenever this happens the investor, thats me, lose big time, such as their last purchase, etc.
I agree with you that MHK mgmt. has been a poor allocator of capital lately...I wrote mgmt. 3 years ago and asked them to please stop the leveraged acquisitions, but obviously they did not listen to me!
As for why the stock price is up, I have no idea besides the obvious, which is that housing will be bottoming this year according to the FOMC. In addition, 11%+ of MHK float is sold short, and so there is a bit of a squeeze going on.