The 5 Most Shorted NYSE Stocks: Chesapeake Energy Leads the Trend

After six weeks of uncertainty and high volatility, the markets seemed to begin to settle down in late February and many stocks began to recover. Most of the stocks traded on the New York Stock Exchange with the greatest number of shares short saw their short interest shrink, at least a little, between the February 12 and February 29 settlement dates. Chesapeake Energy and Freeport-McMoRan led that trend with double-digit percentage short interest declines in the final weeks of the month.

Note that all the 10 most shorted NYSE stocks had more than 120,000 shares short at the end of the most recent settlement period.

Chesapeake Energy Corp. (NYSE: CHK) saw its short interest plunge nearly 13% to more than 204.41 million shares by the end of February. That was the smallest number of shares short since last summer, and it was 31.3% of the company’s float. The days to cover slipped to about five as the daily average volume pulled back from a 52-week high. Fourth-quarter results managed to beat low expectations. Short sellers watched the stock surge more than 56% between the settlement dates, while the S&P 500 rose more than 2%. The stock closed most recently at $4.63, up handily from a recent multiyear low of $1.50. The 52-week high of $16.98 was seen last May

In the final weeks of the month, Sprint Corp.’s (NYSE: S) short interest declined more than 4% to the smallest number of shares short so far this year. The more than 197.16 million shares totaled 31.6% of the float. The days to cover rose from about 10 to more than 12 as the daily average volume declined. Late in the month, Sprint announced plans to open 500 stores, and the share price ended the two-week period nearly 26% higher. It has climbed more since then, and the stock closed most recently at $3.96, in a 52-week trading range of $2.18 to $5.39.

The number of Vale S.A. (NYSE: VALE) shares short inched up by about 1.53 million in the two weeks to around 183.00 million. The previous reading was a 52-week low. At the most recent average daily volume, it would take about six days to cover all short positions. The Brazilian miner saw its shares rise around 23% but then end the short-interest period less than 8% higher than where they started. They have surged again since them, part of an iron ore rally, and the stock closed on Wednesday at $3.93. The 52-week trading range is $2.13 to $9.14.

The short interest in Freeport-McMoRan Inc. (NYSE: FCX) pulled back more than 11% between the most recent settlement dates to more than 182.32 million shares. That was 16.0% of the miner’s float, and it would take about three days to cover all short positions. The number of shares short peaked at the end of January at more than 222 million. Carl Icahn increased his stake in the company in February, and the share price ended the short interest period almost 29% higher. The stock surged around 23% more afterward and closed Wednesday at $9.15. The 52-week low is $3.52, well short of the 52-week high of $23.97.

A 6.6% retreat left Alcoa Inc.’s (NYSE: AA) number of shares short to more than 174.71 million at the end of the two-week period, or 13.6% of the total float. Short interest peaked at more than 187 million in the previous two periods. The days to cover remained about six as of the most recent settlement date. The company saw some insider buying early last month. Its share price increased more than 16% in the short interest period and has headed higher since. The Dow Jones Industrial Average rose more than 2% in the final weeks of February. Alcoa shares have changed hands between $6.14 and $14.29 apiece in the past year. They closed at $9.42 on Wednesday.

Rounding out the top 10 were Pfizer Inc. (NYSE: PFE), Ford Motor Co. (NYSE: F), Petróleo Brasileiro S.A. (NYSE: PBR), Transocean Ltd. (NYSE: RIG) and General Electric Co. (NYSE: GE). The big movers here were Ford and Pfizer, bucking the trend with double-digit surges in short interest. Short sellers also moved on SunEdison Inc. (NYSE: SUNE), but not by enough to lift it into the top 10 most shorted on the New York Stock Exchange.

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