With a rough first quarter in the rear-view mirror, the markets were finally headed north again, with the Dow Jones Industrial Average and S&P 500 having returned to the black for the first time since the beginning of the year. Judging by the moves in the most heavily shorted stocks traded on the New York Stock Exchange between the March 31 and April 15 settlement dates, short sellers became more cautious.
While short interest shrank for most of these stocks, a couple bucked the trend. Freeport-McMoRan saw a bump in the number of its shares short, while Sprint’s short interest was essentially the same as at the end of March. The largest declines among the top 10 were in the shares of Pfizer, GE and SunEdison.
Note that the 10 most shorted NYSE stocks all had more than 100 million shares short at the end of the most recent settlement period.
Even though its short interest barely changed between settlement dates, Sprint Corp. (NYSE: S) ended up rising to the top of the list. The nearly 200.75 million shares short reported most recently totaled 32.2% of the float. The days to cover fell from 11 to nine as the daily average volume increased. One analyst called Sprint a tactical short in early April. Its share price ended the two-week period about 3% higher, while the S&P 500 gained about 1%. The stock closed most recently at $3.68. That is less than a 2% gain from the beginning of the year. The 52-week range is $2.18 to $5.36.
Though it saw a more than 5% retreat, that was not enough keep Ford Motor Co.’s (NYSE: F) number of shares short from rising from the fifth spot on the list in the previous report to the number two spot. The more than 158.56 million shares short at the end of the settlement period represented 4.1% of the total float. That ended eight straight periods of rising short interest. It would take about five days to cover all short positions. Out-of-favor Ford still has upside potential and a nice dividend. Despite its share price dropping about 7% during the period, the stock recovered about 3% of that before April 15. Ford shares have changed hands between $10.44 and $16.10 apiece in the past year, and they were trading at $13.76 on Tuesday’s close, down more than 2% year to date.
The number of shares short in Freeport-McMoRan Inc. (NYSE: FCX) rose 3% or so to more than 149.93 million on the most recent settlement date, ending a four-period streak of shrinking short interest. Some 12.2% of the miner’s float was sold short, and it would take about four days to cover all short positions. Short interest peaked at the end of January at more than 222 million. Freeport announced a management shakeup early in the month, and the share price ended the short interest period about 5% higher, though it was down more than 14% at one point. It rose more afterward and closed most recently at $11.48. The 52-week low is $3.52, well short of the 52-week high of $23.97.
Pfizer Inc. (NYSE: PFE) saw a huge surge in short interest back in early March, and in the most recent period it recovered by almost 54% to nearly 149.82 shares. That was 2.4% of the float, as well as the fewest shares short since January. The days to cover dropped to two as the average daily volume surged to a year-to-date high. Pfizer’s failed merger with Allergan could have wider implications, and short sellers watched the share price rise more than 9% in the first weeks of April. The Dow was up a bit more than 1% in that time. Pfizer shares closed most recently at $33.04, more than 2% higher year to date and in a 52-week trading range of $28.25 to $36.46.
The number of Vale S.A. (NYSE: VALE) shares short shrank by more than 19.36 million in the two weeks to more than 149.56 million. That was the lowest level of short interest in the past year. At the most recent average daily volume, it would take about four days to cover all short positions. The Brazilian miner has been cutting spending and selling assets. Vale’s shares rose more than 25% during the short-interest period. The stock closed most recently at $5.24, up more than 59% year to date but more than 33% lower than a year ago. The share price has ranged from $2.13 to $9.14 in the past 52 weeks.
Rounding out the top 10 were Alcoa Inc. (NYSE: AA), General Electric Co. (NYSE: GE), Chesapeake Energy Corp. (NYSE: CHK), Petróleo Brasileiro S.A. (NYSE: PBR) and SunEdison Inc. (NYSE: SUNE). Of these, Petrobras bucked the trend with a nearly 6% pop in the number of its shares short. Chesapeake, GE and SunEdison all led the trend with double-digit percentage declines. Note that J.C. Penney Co. Inc. (NYSE: JCP) also saw a sharp rise in short interest, but not enough to lift it into the top 10 most shorted NYSE stocks.
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