The 6 Most Shorted NYSE Stocks

November 10, 2017 by Trey Thoelcke

Source: Thinkstock
Even as the market’s bull run is approaching nine years old, the markets have continued to reach new all-time highs. A look at the most shorted stocks traded on the New York Stock Exchange suggests that short sellers were starting to load up on a few of their favorites between the October 13 and October 31 settlement dates, including the top of the heap, AT&T.

Overall the moves were mixed in the latest period, but among those at the top of the list, upswings were stronger than the downward moves. Along with AT&T, short sellers also piled into oilfield services provider Weatherford and broadband provider CenturyLink late last month.

Note that the top six stocks on the list all had more than 130 million shares short at the end of the most recent settlement period. In fact, all the top 10 had short interest of more than 100 million shares.

AT&T

AT&T Inc. (NYSE: T) once again tops the list, with nearly 233.07 million shares short on the most recent settlement date. That was about a 23% jump from two weeks earlier, resuming its upward trend after the pause in the previous period. The latest reading represented 3.8% of the float, and it was the highest level of short interest in at least a year. As of the end of last month, it still would take around five days to cover all short positions.

Perhaps AT&T’s uninspiring quarterly results encouraged the short sellers. In the final two weeks of October, those sellers watched the share price fall about 6%. It has started to recover in the past week, though. The stock hit a new 52-week low of $32.55 per share this week and ended Thursday at $34.00 a share. The share price is about 11% lower than six months ago. AT&T shares reached its 52-week high of $43.03 per share back at the beginning of the year.

Chesapeake Energy

Though the number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short has risen in most periods so far this year, in the latest period it saw a short interest decline of more than 4% to more than 171.71 million. That still represented 19.2% of the company’s float. At the posted daily average trading volume on the settlement date, it would take about eight days to cover all the short positions.

We wondered recently whether Chesapeake has fallen into a death spiral. While its share price ended the two weeks fractionally higher, at one point in the period it was almost 3% lower. The S&P 500 saw a fractional gain between the settlement dates. The stock closed Thursday’s trading at $4.11 a share, which is almost 24% lower than six months ago. The 52-week low of $3.41 was seen during the short interest period. Shares have changed hands as high as $8.20 in the past year.

Rite Aid

After more than 31% pop in the prior period, the reported number of Rite Aid Corp. (NYSE: RAD) shares short retreated about 8% to more than 169.33 million on the most recent settlement date. That was good enough for it to slip to the number three spot on the list. The prior reading was the greatest level of short interest in the past year, and the latest figure was still 16.1% of the retailer’s total float. The average daily trading volume dwindled again in the most recent period, and the days to cover rose from six to eight.

The stock continued to be a member of the 52-week low club during the period. Its shares ended the final two weeks of last month more than 5% lower, despite being up almost 7% early in the period. The stock closed most recently at $1.43 a share, which was almost 65% lower than it was six months ago. Rite Aid shares have changed hands between $1.38 (a low hit on Thursday) and $8.77 in the past year.

Weatherford

Weatherford International PLC (NYSE: WFT) jumped a couple of spots on the list because the number of shares short surged more than 22% in the latter two weeks of October. That was the highest level of short interest since May. The more than 155.40 million shares reported most recently represented 15.9% of the total float. The days to cover reading ended the period at around six after the average daily volume surged.

Weatherford was another member of our 52-week low club last month. Short sellers watched the share price retreat more than 17% but recover a little between the latest settlement dates. In those two weeks, the Dow Jones Industrial Average saw a gain of more than 2%. The stock was last seen trading at $4.07 a share, after sinking to a 52-week low of $3.16 in late October. The 52-week high, from last March, was $7.09.

J.C. Penney

The number of J.C. Penney Co. Inc. (NYSE: JCP) shares short shrank from over 152.10 million in the previous period to more than 148.28 million, still a whopping 51.3% of the struggling retailer’s float. That prior reading was the greatest so far this year, and short interest has now been above 100 million for 15 periods in a row. The daily average trading volume increased again during the period, and the days to cover dropped from 10 to about eight.

J.C. Penney slashed its third-quarter outlook late last month. Its share price retreated about 18% during the short interest period, entirely after the outlook update. However, the stock has jumped almost 12% in the past week, and it closed most recently at $2.75 a share. That still is down more than 50% from six months ago. The 52-week low, seen earlier this week, was $2.35, while the 52-week high of $10.74 was reached last December.

CenturyLink

CenturyLink Inc. (NYSE: CTL) saw the number of its shares short jump more than 13% in the period, lifting the stock back into the top six. The more than 138.76 million shares short reported at the end of October totaled 25.6% of the Louisiana-based telecom’s float. The daily average trading volume increased during the most recent period, and the days to cover slipped from 10 to nine.

The FCC signed off on CenturyLink’s acquisition of Level 3 Communications late last month. The share price ended the latter two weeks of October more than 5% lower. The stock has pulled back even further since the settlement date and closed on Thursday at $15.48 a share. That is about 38% lower than six months ago. The 52-week low of $14.60 was also seen on Thursday, and it compares with 52-week high of $27.61.

And the Rest

Rounding out the top 10 were Bank of America Corp. (NYSE: BAC), Alibaba Group Holding Ltd. (NYSE: BABA), Ford Motor Co. (NYSE: F) and Snap Inc. (NYSE: SNAP). Bank of America was another double-digit percentage gainer. And note that Alibaba’s modest reduction in the number of its shares short was enough for it to drop out of the top six.

General Electric Co. (NYSE: GE) saw a larger pull back in its short interest, allowing it to drop out of top 10 most shorted NYSE stocks altogether. Lingering beyond the spotlight of the top 10 along with GE were Vale S.A. (NYSE: VALE) and Sprint Corp. (NYSE: S). Sprint was still in merger talks with T-Mobile during the period, so short sellers may have something to say about that in the current period, now that the deal is off.