The bull market is now eight years old, and markets still keep on hitting new highs. How have the short sellers been reacting to this pricey market? Judging by the most shorted stocks traded on the Nasdaq, overall those short sellers are fairly enthusiastic. Moves in those shorted stocks were mostly positive between the February 15 and February 28 settlement dates.
That was most notable with Sirius, again king of the hill, which saw a double-digit percentage gain in the number of its shares sold short. Bucking the trend were AMD and Opko Health, though their declines in its short interest were very modest.
Note that still only four Nasdaq stocks had more than 100 million shares short, as of the end of last month. However, two of them remain very far ahead of the pack.
The more than 277.50 million Sirius XM Holdings Inc. (NASDAQ: SIRI) shares short by the end of February was more than 11% higher than on the previous settlement date. That ended three consecutive periods of falling short interest, and it was the greatest number of shares short so far this year. The days to cover slipped from more than 11 to around 10 as the average daily trading volume increased.
Note that Warren Buffett indirectly owns Sirius shares. The stock ended the two-week period more than 4% higher, though it was up more than 6% at one point. The Nasdaq was essentially flat between the settlement dates. The stock is currently trading more than 15% higher year to date. It closed Thursday at $5.15 a share, in a 52-week trading range of $3.74 to $5.22.
After a more than 5% gain in the previous period, the number of shares short in Frontier Communications Corp. (NASDAQ: FTR) rose almost 3% more to over 237.59 million as of the most recent settlement date. That was around 20% of the telecom’s float, as well as the 13th consecutive period with more than 200 million shares short. The days to cover dropped from more than 15 to 11 or so on a rising daily average volume.
Frontier shares pulled back sharply after an earnings miss late in the period. The share price was down more than 11% by the end of the month, after having been up more than 2% a few days earlier. The stock has continued to fall since then and closed most recently at $2.60. Shares have changed hands between $2.49 and $5.77 apiece in the past year.
MannKind Corp.’s (NASDAQ: MNKD) short interest, at more than 105.13 million shares on February 28, was more than 3% higher than on the prior settlement date. That was the fifth time since last May that the number of shares short was more than 100 million, and it was near 32% of the total float. The days to cover rose from more than 21 to about 31 during the period.
MannKind has been looking for ways to increase demand for its Afrezza. Short sellers watched the stock sink about 8% but then almost entirely recover during those two weeks. The stock is now more than 39% lower since the beginning of the year to $1.94. The split-adjusted 52-week low is $1.74, and the 52-week high of $11.20 was seen almost a year ago.