The 6 Most Shorted Nasdaq Stocks: Short Sellers Get Choosy

September 13, 2016 by Trey Thoelcke

While the markets were in a holding pattern ahead of the Labor Day holiday, albeit near all-time highs, the short interest moves in the most shorted stocks traded on the Nasdaq were mixed between the August 15 and August 31 settlement dates. But short sellers clearly had a couple of favorites, as the numbers of shares short in both Frontier Communications and MannKind rose sharply during the two-week period.

Note that still only two Nasdaq stocks had more than 100 million shares short by the end of the most recent period. In fact, the top two are far ahead of the pack.

Sirius XM

The nearly 221.46 million Sirius XM Holdings Inc. (NASDAQ: SIRI) shares short at the end of August was fractionally higher than on the previous settlement date. That was also the fourth period in a row of short interest above 200 million. Some 13.0% of the company’s float was sold short most recently. At the current average daily volume, it would take more than four days to cover all short positions.

There was some speculation about Apple buying Sirius XM late in the month. Sirius shares ended the two-week period more than 2% lower, slipping further from the multiyear high of $4.44 at the end of July. The Nasdaq was down about 1% in the period. The stock closed at $4.14 a share on Monday. The 52-week low is $3.29.

Frontier Communications

The number of shares short in Frontier Communications Corp. (NASDAQ: FTR) has increased in six of the past seven periods. It rose most recently by over 12% to more than 212.48 million. That was 12.3% of the telecom’s float, as well as the highest short interest in at least a year. The days to cover rose from about eight to more than 14 as the average daily volume dwindled.

Frontier named some new regional managers in late August. Short sellers watched the shares sink around 6% in the short interest period, though the stock did try to recover afterward. The share price now is only fractionally lower year to date to $4.64, within a 52-week range of $3.81 to $5.85.

MannKind

MannKind Corp.’s (NASDAQ: MNKD) short interest, at about 95.64 million shares most recently, was nearly 9% higher than on the prior settlement date. That was the greatest number of shares short since May, as well as 29.7% of the total float. The daily average volume more than doubled during the period, but the days to cover shrank from about 42 to less than 20.

MannKind is one of the companies looking to develop an alternative to the EpiPen. Its shares ended the two weeks nearly 20% lower, though they were down more than 30% at one point. They are now more than 50% lower year to date to $0.72, but still up from the multiyear low of $0.64 posted earlier this year. The 52-week high of $3.79 was seen nearly a year ago.

Micron Technology

The number of Micron Technology Inc. (NASDAQ: MU) shares short, at more than 74.11 million by the end of the month, was more than 2% higher than in the previous period. And it was 7.2% of the total float, as well as the highest level of short interest in the past year. As the daily average volume in the period increased, the days to cover slipped to less than three.

Several analysts raised price targets on Micron during the period. The stock rose almost 9% in the short-interest period but ended the two weeks with about a 6% gain. It has increased further since then. Shares closed most recently at $17.15, in a 52-week range of $9.31 to $19.30.

AMD

By the end of month, Advanced Micro Devices Inc. (NASDAQ: AMD) had more than 70.78 million shares short. That was down from more than 72.20 million on the previous settlement date. The latest reading was the lowest short interest so far this year and totaled 11.0% of the company’s float. The days to cover ticked down to less than three as the average daily volume grew in the two weeks.

AMD seems to keep defying the skeptical investors. The ending share price was more than 6% higher than on the previous settlement date, though it was up more than 10% at one point. The stock reached a new 52-week high of $8.00 in August, but shares closed at $5.94 on Monday. The 52-week low is $1.65.

Opko Health

Opko Health Inc.’s (NASDAQ: OPK) short interest, at around 69.65 million shares as of the most recent settlement date, was down around 1% from the previous period. That was 21.2% of the total float. The daily average volume shrank modestly during the two weeks, and by the end of the month, the days to cover had risen from near 22 to more than 24.

Opko completed its acquisition of Transition Therapeutics in late August. The stock closed Monday at $9.89, in a 52-week range of $7.12 to $11.85. The share price ended the two-week short-interest period almost 10% lower, though it has recovered more than 7% since that time.

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And Others

Rounding out the top 10 were Intel Corp. (NASDAQ: INTC), Novavax Inc. (NASDAQ: NVAX), JD.com Inc. (NASDAQ: JD) and Marriott International Inc. (NASDAQ: MAR).  Note that short sellers abandoned Cisco Systems Inc. (NASDAQ: CSCO) and Huntington Bancshares Inc. (NASDAQ: HBAN), allowing them to drop out of the top 10. In fact, Huntington has fallen out of the top 50.

Others that made notable moves away from the top 10 in the most recent period were Apple Inc. (NASDAQ: AAPL), Microsoft Corp. (NASDAQ: MSFT) and American Airlines Group Inc. (NASDAQ: AAL).