While volatility has roared back into the markets in February, bringing with the first 10% correction in ages, everything looked sunny and bright back in January. Sell-offs can be good for short sellers, depending on how they are positioned. Judging by the most shorted stocks traded on the New York Stock Exchange between the January 12 to January 31 settlement dates, those sellers may have been surprised by the big sell-off, as overall their moves were mixed and modest in the period.
Short sellers of Ford may have turned out lucky, as the carmaker saw a double-digit percentage gain into the end of the month. However, the number of shares short in Rite Aid and Bank of America shrank handily during those two weeks.
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 110 million shares.
AT&T Inc. (NYSE: T) once again tops the list, despite a more than a 5% decline to more than 183.05 million shares short by the most recent settlement date. That resumed a run of declines in the four periods to the end of last year, but it was still down from a 52-week high of over 230 million. The latest reading represented 3.0% of the company’s float. As of the end of last month, it still would take around six days to cover all short positions, even though the average daily trading volume shrank somewhat.
AT&T announced recently that it is preparing to roll out super-fast 5G. Yet, in the first two weeks of January, investors watched the share price fall more than 5%, though it was down more than 6% at one point. The stock has continued to recover since then and ended Friday’s trading at $36.05 a share, which is down about 6% from six months ago. AT&T shares have traded hands between $32.55 and $42.70 in the past 52 weeks.
Weatherford International PLC (NYSE: WFT) leaped up to the second spot on the list with about a 7% gain in the number of its shares sold short in the latter weeks of January. That more than reclaimed the modest shrinkage in the number of its shares short in the previous period. The more than 155.92 million shares reported most recently represented 16.0% of the total float. The days to cover reading ended the period at around nine as the average daily volume dropped sharply.
Weatherford has been a regular member of the 52-week low club since its disappointing earnings. Short sellers watched the share price climb about 3% but end the two-week period down more than 8%. The stock closed most recently at $2.89 a share, up from last week’s 52-week low of $2.64. The 52-week high, reached last March, was $7.09. The stock is down more than 16% year to date.
The number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short has risen in many periods in the past year, but in the latest period it saw a rise of less than 1% to more than 151.62 million. That represented 16.9% of this oil and gas company’s float. At the posted daily average trading volume on the settlement date, it would take about five days to cover all the short positions.
Chesapeake announced some layoffs during the short interest period. While its share price ended the two weeks almost 17% lower, the stock has retreated more than that since that time. The S&P 500 saw just a fractional increase between the settlement dates. The stock was last seen trading at $2.85 a share, which is more than 30% lower year to date. The 52-week low of $2.53 was seen on Friday. Shares have changed hands as high as $6.59 in the past year.