Investing

3 Short Seller Favorites Hit New Highs

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The Dow Jones Industrial Average has not only hit the 20,000 milestone but stayed there for a couple of days. And short sellers may be keeping an eye on three of their favorite stocks in the days ahead. That’s because Bank of America Corp. (NYSE: BAC), Sirius XM Holdings Inc. (NASDAQ: SIRI) and Sprint Corp. (NYSE: S), which are among the five most shorted stocks traded on the Nasdaq and the New York Stock Exchange, have each hit new 52-week highs as well.

After a nearly 22% reduction in Bank of America’s number of shares short in the previous period brought it to the lowest level since September, there was hardly any change between the December 30 and January 13 settlement dates. The more than 107.40 million shares short reported most recently still represented 1.1% of the money center bank’s float. The average daily trading volume increased in the period, but the days to cover remained at less than one.

This bank posted better-than-expected earnings earlier this month. Short sellers watched the shares rise around 4% in the short interest period, while the S&P 500 increased less than 2% in that time. The shares rose about 5% in the past week and hit a new 52-week high of $23.55 early Thursday. The 52-week low is $10.99, and the consensus price target is $24.79.

The more than 265.87 million Sirius XM shares short by the middle of January was around 5% lower than on the previous settlement date, as well as the lowest level of short interest since October. Some 16.1% of the company’s float was sold short most recently. The days to cover dropped from almost 14 to around nine as the average daily trading volume picked up.

Sirius said during the period that it had exceeded it subscriber guidance for 2016. Its shares ended the two-week period more than 3% higher, most of that gain coming in the first few days of the year. The Nasdaq was up about the same amount between the settlement dates. In the past week, Sirius shares rose more than 3% and hit a new 52-week high of $4.76 late Thursday. The 52-week low is $3.29, and the consensus analyst target is $5.01.

Sprint’s short interest decline in the previous four periods ended this month. The number of its shares short had a more than 6% gain between the most recent settlement dates. The more than 141.04 million shares reported totaled 22.2% of the float. At the most current daily average, it would take about eight days to cover all the short positions.

Sprint said in the period that it would add 5,000 jobs. The telecom’s share price ended the two weeks more than 2% higher than where it began, though it was up more than 4% at one point. The shares rose about 5% in the past week and hit a new 52-week high of $9.48 Thursday morning. The 52-week low is way down at $2.45, and even the consensus price target is just $6.74, suggesting that analysts may consider it overvalued.

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