The 6 Most Shorted NYSE Stocks: Bye-Bye Baxter

June 10, 2016 by Trey Thoelcke

It may have been the time of “sell in May and go away,” but it seems the short sellers were neither strongly for nor against the notion, as least as far as the most heavily shorted stocks traded on the New York Stock Exchange are concerned. Between the May 13 and May 31 settlement dates, short interest moves among these stocks were mixed and largely in single-digit percentages.

The biggest mover was Baxter International Inc. (NYSE: BAX), which had leaped into the top 10 most shorted NYSE stocks in the previous period when its short interest doubled, but this time it dropped out of the list again as short sellers appeared to change their minds.

Note that the six most shorted NYSE stocks still all had more than 100 million shares short at the end of the most recent settlement period.

Vale

The number of Vale S.A. (NYSE: VALE) shares short grew by more than 15.18 million in the two weeks, or more than 8%, to more than 193.60 million, making it the most shorted NYSE stock. And that followed a nearly 10% gain in the previous period. At the most recent average daily volume, it would take about seven days to cover all short positions.

The Brazilian miner aims to sell more iron ore to China. Vale’s shares ended the short-interest period almost 5% lower, though they were up more than 4% at one point. The stock closed most recently at $4.62, still up more than 40% year to date, but also more than 32% lower than a year ago. The share price has ranged from $2.13 to $6.92 in the past 52 weeks.

Sprint

As its short interest shrank more than 9% between settlement dates, Sprint Corp. (NYSE: S) slipped from its place at the top of the list. The more than 178.51 million shares short reported most recently totaled 28.5% of the float. The days to cover increased from 12 to 15 as the daily average volume declined.

Merrill Lynch was disappointed in Sprint’s most recent earnings report. Its share price rose more than 11% in the two-week period, and a little more since the settlement date. The S&P 500 gained less than 3% in the short interest period. The stock closed most recently at $3.81, or more than 5% higher than at the beginning of the year. The 52-week trading range is $2.18 to $5.29.

Ford

After retreating about 6% in the previous period, short interest in Ford Motor Co. (NYSE: F) reversed course and gained about 2%, bringing the number of its shares short to more than 147.02 million at the end of the settlement period. That represented 3.8% of the total float, and it ended three periods in a row of decline. It would take about seven days to cover all short positions.

Ford F-150 pickups continue to be wildly popular. The share price increased about 2% during the period, though it retreated a bit afterward. Ford shares have changed hands between $10.44 and $15.84 apiece in the past year. They were trading at $13.26 on Thursday’s close, down almost 6% year to date.

Freeport-McMoRan

The number of shares short in Freeport-McMoRan Inc. (NYSE: FCX) grew about 7% to around 121.18 million on the most recent settlement date, taking back much of the more than 8% retreat in short interest in the previous period. Some 10.3% of the miner’s float was sold short at the end of May, and it would take about three days to cover all short positions.

The company canceled a spin-off and a contract during the two-week period, and the share price ended the short interest period more than 6% higher, though it was up almost 12% at one point. The stock closed most recently at $10.90 per share. The 52-week low is $3.52, well short of the 52-week high of $21.17.

Alcoa

Four consecutive periods of retreat, most recently by less than 130,000, left Alcoa Inc.’s (NYSE: AA) number of shares short at more than 126.43 million by the end of the latest period. That was 9.8% of the total float. A drop in the average daily volume lifted the days to cover to about six as of the most recent settlement date.

Alcoa got a big upgrade from Merrill Lynch recently. Its share price rose more than 4% but then gave up most of that gain in the short interest period. The Dow Jones Industrial Average had risen more than 2% by the end of the month. Alcoa shares have changed hands between $6.14 and $12.34 apiece in the past year. They closed at $9.84 on Thursday.

Petrobras

Petróleo Brasileiro S.A. (NYSE: PBR), better known as Petrobras, saw the number of its shares short shrink by about 3% in the two weeks to more than 108.48 million as May came to a close. The days to cover remained at about three as the average daily volume increased slightly. Note that the level of short interest has trended downward since the beginning of the year.

Petrobras still is not finding the love from analysts. Its shares rose about 4% in the period but ended the two weeks down more than 18%. They recovered much of that ground afterward and closed most recently at $6.89, up more than 60% year to date. The 52-week high of $9.72 occurred almost a year ago, while the $2.71 low was seen last January.

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And Others

Rounding out the top 10 were General Electric Co. (NYSE: GE), Chesapeake Energy Corp. (NYSE: CHK), J.C. Penney Co. Inc. (NYSE: JCP) and Transocean Ltd. (NYSE: RIG). Here again, the short interest swings were mixed but modest.

Making a run at the top 10 in the most recent period were Fiat Chrysler Automobiles N.V. (NYSE: FCAU) and, especially, Hewlett Packard Enterprise Co. (NYSE: HPE), with the number of its shares short surging more than 344%. Will they join the ranks of the top 10 next time, or drop away again as Baxter has done? Stay tuned.