Did investors sell in May and go away, even in the face of increasing fears of trade wars with China and U.S. allies, not to mention the specter of rising interest rates? The Nasdaq, the Dow Jones industrial average and the S&P 500 did all lose some ground last month, as there were few earnings reports to help buoy them. That will soon change, for better or worse.
Judging by the most shorted stocks traded on the New York Stock Exchange between the June 15 and June 29 settlement dates, those sellers were focused on a couple of favorites. Otherwise moves among these stocks were mixed and mild.
Note that the five most shorted NYSE stocks still 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.
The reported number of Rite Aid Corp. (NYSE: RAD) shares sold short grew from more than 158.84 million to nearly 168.15 million as of the most recent settlement date, lifting it two spots to the top of the list. That was 16.0% of the company’s total float and the highest level of short interest so far this year. The average daily trading volume surged during the period, and the days to cover figure shrank from about 14 to six.
Late in the month, Rite Aid posted quarterly results that were deemed “good enough.” Its share price rose more than 34% but ended only about 10% higher during those two weeks. In the past week, the stock is down fractionally, and it closed most recently at $1.68 a share. That was more than 21% lower compared with the beginning of the year. Rite Aid shares have traded between $1.38 and $2.80 apiece in the past 52 weeks.
The number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short declined more than 6% in the most recent period, but this oil and gas company stayed in the number two spot on the list. The reported short interest of about 159.52 million shares was 17.8% of the total float, and it was the fifth 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 five days to cover all the short positions.
Natural gas inventories were increasing again during the latest short interest period, and Chesapeake’s share price ended those two weeks more than 15% higher than where it began. The S&P 500 was down fractionally between the settlement dates. The stock has risen more since then, and it ended trading at $5.15 a share on Wednesday. That is more than 20% higher year to date. Shares have changed hands as high as $5.60 and as low as $2.53 in the past year.