When the first-quarter earnings reporting season kicked off in the middle of last month, it looked at first like the overall solid results might provide a boost for the faltering markets. But the results were not enough to overcome concerns about rising interest rates and potential trade wars. The big U.S. indices had slipped by the end of the month.
Judging by the most shorted stocks traded on the New York Stock Exchange between the April 13 and April 30 settlement dates, those sellers were becoming more discriminating, focusing a few favorites. That included in particular AT&T, with unimpressive quarterly results helping it reclaim the title of the most shorted NYSE stock. The former top of the heap, Chesapeake Energy, also saw a bump in the number of shares short, but short interest in the rest of the top six declined in the latter weeks of April.
Note that the six most shorted NYSE stocks still had more than 125 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) regained its place in the number one spot with a more than 12% surge in its shares short as of the most recent settlement date. The latest reading of nearly 170.96 million was not far off the year-to-date high of over 193 million shares. Note that the short interest had been shrinking in most recent periods. The most recently reported figure represented 3.1% of the company’s float. As of the end of last month, it would take around five days to cover all short positions, after the average daily trading volume increased notably.
AT&T’s latest quarterly results drove investors to the exits. The entire 7% or so decline in the stock in the latter two weeks of April came in the wake of that earnings report, and shares have retreated more since then. They ended trading on Wednesday at $31.40 a share, which is down more than 18% year to date. AT&T has changed hands between $31.17 and $39.80 a share in the past 52 weeks.
Though the number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short grew more than 4% in the most recent period, this oil and gas company slipped to second place on the list. The reported short interest of nearly 191.99 million shares was 21.4% of the total float, though that was the second time since mid-February that the total was less than 200 million. At the posted daily average trading volume on the settlement date, it would take about seven days to cover all the short positions.
Chesapeake reported better-than-expected quarterly earnings during the short interest period. Its share price ended those two weeks more than 4% lower than where it began, though it has more than recovered since then. The S&P 500 was down about 1% between the settlement dates. The stock ended trading at $3.26 a share on Wednesday, which is around 20% lower year to date. Shares have changed hands as high as $3.33 and as low as $2.86 in the past year.
Back in March, General Electric Co. (NYSE: GE) saw the number of its shares short jump nearly 14% to a year-to-date high, and short sellers have been slowly loosening their grip since then. The more than 146.86 million shares reported most recently was down more than 2% for the period and represented 1.7% of the conglomerate’s total float. The daily average trading volume grew somewhat, but the days to cover reading ended the month still at about two.
An independent research firm sees big changes coming for GE that could boost shares more than 40%. The stock ended the short interest period almost 5% higher, though it was up twice that much at one point. In those two weeks, the Dow pulled back about 2%. GE’s share price was last seen at $14.62, which compares with a 52-week low of $12.73 from back in March. The 52-week high, which was reached last summer, was $29.47 a share. The stock now is more than 18% lower year to date.