Volatility roared back into the markets in early February, bringing with it the long overdue 10% correction. Sell-offs can be good for short sellers, depending on how they are positioned and how nimble they are. Judging by the most shorted stocks traded on the New York Stock Exchange between the January 31 and February 15 settlement dates, energy may have attracted many of those sellers.
Chesapeake Energy and Weatherford both saw the numbers of their shares short jump by double-digit percentages during those two weeks that included the panic selling. Otherwise, the short interest moves were by and large mixed and modest in the period.
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 little change in its shares short as of the most recent settlement date. The latest reading of about 182.00 million is still down from a 52-week high of over 230 million. In fact, the short interest has shrunk in most recent periods. The latest reading again represented 3.0% of the company’s float. As mid-month, it would take around four days to cover all short positions, as the average daily trading volume increased.
The volatility earlier this month knocked AT&T stock back somewhat. In the first two weeks of February, investors watched the share price fall about 10% and recover enough to end the period less than 4% lower. The stock has been relatively flat since then and ended Tuesday’s trading at $36.87 a share, which is down about 4% from year to date. AT&T shares have traded hands between $32.55 and $42.70 in the past 52 weeks.
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 climbed one spot on this list. A rise of more than 18% brought short interest to more than 179.36 million, or 20.0% of this oil and gas company’s float. At the posted daily average trading volume on the settlement date, it would take about four days to cover all the short positions.
Chesapeake was a regular member of our 52-week club in the first weeks of this month. While its share price ended those two weeks more than 16% lower, the stock has reclaimed most of that loss since that time. The S&P 500 saw just a fractional increase between the settlement dates. The stock was last seen trading at $3.06 a share, which is more than 25% lower year to date. The 52-week low of $2.53 was reached earlier this month. Shares have changed hands as high as $6.59 in the past year.
Weatherford International PLC (NYSE: WFT) slipped to the third spot on the list despite about a 12% gain in the number of its shares sold short in the first two weeks of February. That followed a 7% bump in its short interest in the previous period. The more than 174.77 million shares reported most recently represented 17.9% of the total float. The days to cover reading ended the period at around five, as the average daily volume increased sharply.
Weatherford faced downgrades and price target cuts between the latest settlement dates. Short sellers watched the share price tumble about 22%, while the S&P 500 retreated only fractionally. Afterward, the stock tried to recover, and it closed most recently at $2.82 a share, up from a recent 52-week low of $2.62. The 52-week high, reached last March, was $7.09. The stock is now down more than 18% year to date.