Canadians should be taking a closer look at shorting opportunities in the used car industry and real estate sector, according to one investor.

In an interview with BNN Bloomberg on Wednesday, Brad Lamensdorf, principal and co-manager of the AdvisorShares Ranger Equity Bear ETF (HDGE), said investors should be looking for “negative cash flow generating type stocks, over-levered companies that may have made an acquisition or a merger to possibly fill a hole.”

“There are lots of tricks, accounting tricks that the corporations use, and we try to dig out and find the companies that really aren't worth what they're trading at now,” Lamensdorf said.

“For instance, last year our biggest position was Carvana Co and you know it fell apart, we covered it at around US$50.”

At the closing bells on Tuesday, Carvana closed at US$10.72 a share.

Lamensdorf recommended shorting CarMax, Inc. (KMX), Credit Acceptance Corp. (CACC) and Realty Income Corp. (O) as his three hot picks.

Lamensdorf said he does not own his three hot picks as they’re being shorted. He, his family members, his investment banking clients and firm do not own these stocks.

Check out the full video at the top of the article to learn more.