With the holiday shopping season looking strong and tax reform seeming all but certain earlier this month, how were short sellers positioning themselves for the end of the year? Judging by the most shorted stocks traded on the New York Stock Exchange between the November 30 and December 15 short interest settlement dates, they were cautious. The number of shares short in most of these stocks shrank.
For the second period in a row, the most notable rise in short interest was seen in Bank of America. On the other hand, the number of Weatherford shares short shrank by a double-digit percentage, leading the decliners at the top of the list.
Note that the six most shorted NYSE stocks all had more than 130 million shares short at the end of the most recent settlement period. In fact, all the top 10 had short interest of more than 100 million shares.
AT&T Inc. (NYSE: T) once again tops the list, despite more than an 8% drop to more than 193.37 million shares short on the most recent settlement date. That was the third consecutive decline, down from a year-to-date high over 230 million. The latest reading represented 3.2% of the company’s float. As of the middle of this month, it would take around six days to cover all short positions, despite a slight retreat in the average daily trading volume.
AT&T is looking forward to the next generation of broadband. In the initial two weeks of December, investors watched the share price rise almost 5%, and it continued to swell afterward. The stock did hit a new 52-week low of $32.55 per share early last month but ended Wednesday’s trading at $38.89 a share. The latest share price is more than 3% higher than six months ago. AT&T shares reached a 52-week high of $43.03 per share back at the beginning of this year.
The number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short has risen in most periods this past year, but in the latest period it saw a decline of about 2% to more than 165.92 million. That represented 18.5% of the oil and gas company’s float. At the posted daily average trading volume on the settlement date, it would take about six days to cover all the short positions.
We wondered last month whether Chesapeake has fallen into a death spiral. While its share price ended the two weeks more than 14% lower, it has recovered more than 6% since then. The S&P 500 saw about a 2% gain between the settlement dates. The stock closed Wednesday’s trading at $3.88 a share, which is about 19% lower than six months ago. The 52-week low of $3.41 was seen back in October. Shares have changed hands as high as $7.62 in the past year.
The reported number of Rite Aid Corp. (NYSE: RAD) shares sold short retreated more than 2% to more than 162.24 million as of the most recent settlement date. That followed about a 7% decline in the previous period, and it was the 10th straight period with more than 100 million shares short. The latest figure was 15.4% of the retailer’s total float. The average daily trading volume decreased in the most recent period, so the days to cover rose from five to eight.
Rite Aid has continued to suffer after its failed merger with Walgreens. Its shares ended the first two weeks of this month more than 5% lower, though it was down more than 12% earlier in the period. The stock closed most recently at $2.01 a share, which was more than 46% lower than it was six months ago. Rite Aid shares have changed hands between $1.38 and $8.77 in the past year.