Concerns about inflation and rising rates in this nine-year-old bull market were joined at the beginning of this month by fresh worries about a trade war as the administration announced new tariffs aimed especially at China. Volatility understandably spiked again. However, 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 February 28 and March 15 settlement dates, those sellers were stocking up, as they all saw short interest rise. Drugmaker Pfizer led that trend, with the number of its shares sold short more than doubling in the period. Rite Aid and General Electric also saw double-digit percentage growth in short interest during those two weeks.
Note that the six most shorted NYSE stocks all had more than 140 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.
The number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short has risen in many periods in the past year, and in the latest period it clung to the top spot on this list with a rise of almost 16%. The short interest of more than 211.09 million shares was 23.6% of this oil and gas company’s float. At the posted daily average trading volume on the settlement date, it would take about seven days to cover all the short positions.
Chesapeake wowed investors with its most recent quarterly results. While its share price ended that two-week period more than 6% lower, the stock had been up more than 12% at one point. The S&P 500 saw a little more than 1% gain between the settlement dates. The stock ended trading at $3.12 a share on Monday, which is almost 24% lower year to date. The 52-week low of $2.53 was seen last month. Shares have changed hands as high as $6.59 in the past year.
AT&T Inc. (NYSE: T) again comes in at the number two spot with about a 2% increase in its shares short as of the most recent settlement date. The latest reading of more than 178.15 million is still down from a year-to-date high of over 193 million shares. In fact, the short interest has shrunk in most recent periods. The latest reading represented 2.9% of the company’s float. As of the middle of this month, it would take around nine days to cover all short positions, after the average daily trading volume fell somewhat.
AT&T continues to be a popular defensive stock for uncertain times, and investors watched the share price rise almost 4% but end the period up less than 1%. The shares have retreated more since then and ended Monday’s trading at $34.69 a share, which is down about 10% from year to date. AT&T shares have changed hands between $32.55 and $42.70 apiece in the past 52 weeks.
Weatherford International PLC (NYSE: WFT) remains in the third spot on the list despite a more than 6% rise in the number of its shares sold short in the initial two weeks of March. That recovered much of a 9% retreat in its short interest in the previous period. The more than 168.73 million shares reported most recently represented 17.2% of the total float. The days to cover reading ended the period at around nine, as the average daily volume shrank somewhat.
At least one analyst saw huge upside potential for Weatherford between the latest settlement dates. Short sellers watched the share price seesaw between down more than 6% and up almost 7%, only to end the period just fractionally higher. The stock closed most recently at $2.41 a share, after hitting a 52-week low of $2.19 earlier in the day. The 52-week high, reached last April, was $6.86. The stock is now down more than 30% year to date.