Investing

The 6 Most Shorted NYSE Stocks

Trey Thoelcke

Published: July 25, 2018 6:50 am

Last Updated: March 13, 2020 8:07 pm

The broader markets have eked out modest gains since the first of June, with the Nasdaq trading near all-time highs. This despite increasing fears of the effects of trade wars and rising interest rates. In the first two weeks of July, investors were also bracing for the start of the second-quarter earnings reporting season.

Judging by the most shorted stocks traded on the New York Stock Exchange between the June 29 and July 13 settlement dates, those sellers were cautious, with short interest declines not only outnumbering the gains but showing stronger moves. Just a couple of the stocks on this list bucked that trend, with modest increases in the number of their shares short in the period.

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 100 million shares.

Rite Aid

The reported number of Rite Aid Corp. (NYSE: RAD) shares sold short grew from nearly 168.15 million to more than 180.95 million between the most recent settlement dates, affirming this specialty retailer’s spot at the top of the list. That was 17.1% of the company’s total float and the highest level of short interest so far this year. The average daily trading volume plunged during the period, and the days to cover figure jumped from about six to 19.

Late last month, Rite Aid posted quarterly results that were deemed “good enough.” Its share price rose nearly 5% but gave up most of that gain by the latest settlement date. In the past week though, the stock has seen a pop of more than 2%, and it closed most recently at $1.82 a share. That still was more than 14% 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.

Chesapeake Energy

The number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short declined more than 7% 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 almost 147.89 million shares was 16.5% of the total float, and it was the sixth 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 six days to cover all the short positions.

Natural gas inventories were increasing again during the latest short interest period, but Chesapeake’s share price ended those two weeks only about 1% higher than where it began. The S&P 500 was up more than 3% between the settlement dates. The stock has fallen since then, and it ended trading at $4.52 a share on Tuesday. That still is more than 51% higher since the beginning of May. Shares have changed hands as high as $5.60 and as low as $2.53 in the past year.

J.C. Penney

The number of J.C. Penney Co. Inc. (NYSE: JCP) shares short grew by less than 600,000 in the latest period to over 139.51 million. Short interest has increased in four of the past five periods and was a whopping 47.6% of the struggling retailer’s float most recently. The daily average trading volume shrank again during the two-week period, so the days to cover grew from about 10 to 19.

The struggling retailer opened a new store in Brooklyn in July. Its share price ended the short interest period up about 3%, though it had been nearly 6% higher at one point. The stock made a more than 10% run in the past week but gave up almost all the gain and closed most recently at $2.41 a share. That is around 31% lower than at the beginning of the year. The 52-week low, seen back in May, was $2.25, while the 52-week high of $5.63 was reached almost a year ago.

Sprint

After a retreat of about 5% in the latter two weeks of last month, Sprint Corp. (NYSE: S) short interest declined almost 2% more in the latest period. That was over 2.6 million shares less by mid-month to more than 134.16 million, or 25.4% of the telecom’s total float. The days to cover climbed to 17 from 13 as the daily average volume slipped to a new year-to-date low.

Sprint recently named a new chief financial officer. The stock ended the latest short interest period more than 4% higher, with most of that gain coming early in the period, but it retreated again afterward. The shares closed most recently at $5.40 apiece, which is down about 17% from the year-to-date high in April. They hit a 52-week high of $8.92 last August, which compares to the 52-week low of $4.81 seen back in March.

Alibaba

Alibaba Group Holding Ltd. (NYSE: BABA) climbed up one spot on the list as the number of its shares increased more than 4% from the previous period. The more than 133.75 million shares reported in the middle of this month totaled 5.2% of the Chinese e-commerce giant’s float, and it was highest level of short interest so far this year. The daily average volume decreased during the most recent period, lifting the days to cover from six to nine.

Alibaba announced a notable partnership with Siemens earlier this month. The share price ended the first two weeks of July about 4% higher, though it had been up nearly 7% earlier in the period. The stock closed Tuesday at $189.00 a share. That is more than 7% lower since the first of June. The 52-week low of $147.50 was seen almost a year ago, and the 52-week high of $211.70 last month.

Weatherford

Weatherford International PLC (NYSE: WFT) again finds itself at the sixth spot on the list even though the number of its shares sold short slipped 8% or so in the first two weeks of July. In fact, short interest has decreased for eight periods in a row. The approximately 133.75 million shares reported most recently represented 11.6% of the total float. The days to cover reading ended the two weeks at around 10 after a slip in the average daily volume.

During the short interest period, Weatherford announced the sale of some assets in the Middle East. Short sellers watched the share price rise about 10% in those two weeks, though it has pulled back since. The stock closed most recently at $3.37 a share. That’s up from a 52-week low of $2.07 in early April. The 52-week high, seen last September, was $4.72. Now the stock is only down less than 3% year to date.

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And the Rest

Rounding out the top 10 were Snap Inc. (NYSE: SNAP), General Electric Co. (NYSE: GE), Bank of America Corp. (NYSE: BAC) and Ford Motor Co. (NYSE: F). Ford and GE were the big movers here, with double-digit percentage declines in the number of their shares short. Snap saw the only gain among these four, but it was a modest one.

Note that perennial short seller favorite AT&T Inc. (NYSE: T) continued its fall from the top 10 most shorted NYSE stocks list with another sizable retreat in the number of its shares short. Lingering along with it outside the spotlight of the top 10 were telecom CenturyLink Inc. (NYSE: CTL) and offshore driller Ensco Corp. (NYSE: ESV).