The 6 Most Shorted NYSE Stocks

February 10, 2017 by Trey Thoelcke

In the final weeks of January, the Dow Jones Industrial Average hit the 20,000 milestone for the first time, and Donald Trump was sworn in at the 45 president of the United States. There were some notable moves in the most shorted stocks traded on the New York Stock Exchange between the January 13 and January 31 settlement dates, as short sellers appear to be repositioning themselves for the weeks and months ahead.

Those changes include a new king of the hill among the most shorted NYSE stocks, as well as a long-time short seller favorite that may be on its way out of the top 10.

Note that the top five stocks on the list all still had more than 100 million shares short at the end of the most recent settlement period.

Weatherford International

The new king of the hill is Weatherford International PLC (NYSE: WFT). Following three consecutive periods of little change, the number of shares short jumped about 14% to over 121.90 million. That figure represented 12.6% of this oil and gas driller’s total float. At the most current daily average, it would take about seven days to cover all the short positions.

Weatherford saw an analyst downgrade in late January. Its shares ended the two-week period about 1% lower, though they were up 3% three times in the period. The stock closed most recently at $5.96. That still is more than 19% higher year to date, though. The share price has ranged from $3.73 to $8.49 in the past 52 weeks.

Sprint

The short interest has declined in five of the previous six periods. The number of Sprint Corp. (NYSE: S) shares short retreated more than 15% between the most recent settlement dates, with the stock slipping from the top spot on the list. The more than 119.42 million shares reported totaled 18.9% of the float. The days to cover rose to about six from less than four during those two weeks.

Sprint announced an acquisition of a streaming music service last month. Sprint’s share price ended the two weeks more than 7% higher than where it began, though it was up more than 9% at one point. The share price has climbed about 42% in the past six months and closed most recently at $8.77. The stock hit a 52-week high of $9.65 late last month, well up from the 52-week low of $2.53 almost a year ago.

Alibaba

Alibaba Group Holding Ltd. (NYSE: BABA) saw its short interest grow only a little more than 1% to nearly 115.53 million shares by the end of the month. That was on top of a 3% gain in the previous period, and it totaled 4.8% of the float most recently. As of the latest settlement date, it would take about nine days to cover all short positions.

During the period, Alibaba reported better-than-expected quarterly results. Short sellers watched the share price jump about 8% and then pull back during the short interest period. The stock closed most recently at $103.34 a share, which is more than 17% higher since the beginning of the year. The 52-week trading range is $59.85 to $109.87.

Chesapeake Energy

After about a 6% gain in Chesapeake Energy Corp.’s (NYSE: CHK) short interest in early January, it saw another 3% or so rise in the final two weeks of last month. The more than 111.37 million shares short reported most recently were 12.7% of the float. Note that short interest was about 225 million shares a year ago. As of the most recent settlement date, the days to cover reading was about three.

The company announced last month that it would be reinstating dividends on its preferred stocks. Between the latest settlement dates, the share price increased about 3% but then ended up in the red by more than 6%. The stock pulled back more afterward and closed most recently at $6.31. That was still up handily from the multiyear low of $1.53 early last year, but lower than the 52-week high of $8.20 seen in mid-December.

Bank of America

After a sizable reduction in Bank of America Corp.’s (NYSE: BAC) number of shares short back in December brought it to the lowest level since last September, things have been fairly quiet so far this year. The more than 105.32 million shares short reported most recently (less than a 2% drop) represented 1.0% of the money center bank’s float. The average daily trading volume decreased in the period, but the days to cover remained about one.

A new study showed that, despite denials, this bank does do business with cannabis businesses. The shares ended the two weeks less than 2% lower, while the S&P 500 was basically flat in that time. The stock has changed hands between $10.99 and $23.55 a share in the past year, and it closed at $23.12 on Thursday, up more than 4% year to date.

AT&T

The more than 97.24 million AT&T Inc. (NYSE: T) shares short at the end of January was more than 6 million greater than on the prior settlement date. It also was 1.6% of the float, and it ended three straight periods of shrinking short interest. As of the latest settlement date, it would take about four days to cover all short positions.

Peers AT&T and Verizon seem to be taking different paths as they position themselves for the future. AT&T shares were up nearly 3% by the end of the most recent short interest period, while the Dow was essentially flat in that time. The stock closed Thursday at $41.31, which was almost 3% lower than at the beginning of the year. The 52-week trading range is $35.91 to $43.89.

And the Rest

Rounding out the top 10 were Seadrill Ltd. (NYSE: SDRL), General Electric Co. (NYSE: GE), Host Hotels & Resorts Inc. (NYSE: HST) and Vale S.A. (NYSE: VALE). The big mover here was Vale, with a more than 25% retreat in the number of its shares short, though not quite enough for it to slip out of the top 10 most shorted NYSE stocks. Note that GE had a notable increase in short interest, after two straight periods with sharp declines.

Lingering outside the top 10 is CenturyLink Inc. (NYSE: CTL), as well as Ford Motor Co. (NYSE: F) and J.C. Penney Co. Inc. (NYSE: JCP), which both saw sharp pull backs in short interest as well.

The most shorted Nasdaq stocks in the same period included Sirius XM, Intel and AMD.

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