The arrival of September means that summer vacation time is over and it’s time to turn attention to the race to the end of the year. This year that includes not only the holiday shopping season but the midterm elections in the United States. Meanwhile, the trade war with China ramps up and interest rates and inflation rise, yet the stock market keeps trading near all-time highs (in a record bull run).
Judging by the most shorted stocks traded on the New York Stock Exchange between the August 31 and September 14 settlement dates, those sellers were focused on a couple of stocks, including Infosys, which jumped into the top six on a surge in its shares short.
Note that the six most shorted NYSE stocks had more than 125 million shares short at the end of the most recent settlement period. In fact, all of the top 10 had short interest of more than 100 million shares.
The reported number of Rite Aid Corp. (NYSE: RAD) shares sold short dropped by near 530,000 to 162.18 million or so between the most recent settlement dates, yet this specialty retailer stayed atop the list. That was 15.4% of the company’s total float, as well as more than 20 million less than the highest level of short interest so far this year. The average daily trading volume rose during the period, and the days to cover figure slipped from about 15 to 13.
Goldman Sachs recently initiated coverage of Rite Aid with a Sell rating and a price target of just $1. The share price ended the latest settlement date more than 6% lower, though it had been down as much as 11% in the interval. In the past week, the stock dropped 7% but recovered, and it closed most recently at $1.23 a share, a 52-week low. That was more than 41% lower than 90 days ago. Rite Aid shares have traded as high as $2.55 apiece in the past 52 weeks.
India-based Infosys Ltd. (NYSE: INFY) jumped into the top six in the initial weeks of the month That’s because the number of its shares short surged more than 97% in the period to 13.95 million or so. Note that at the average daily volume on the latest settlement date, it would take about 14 days for those sellers to cover all their short positions.
This consulting, IT and outsourcing company announced a joint venture that expands its footprint into Singapore earlier this month. The share price ended the latest settlement period less than 2% lower, and it retreated more afterward. The shares closed most recently at $10.15. However, that still is up about 9% in the past three months. The shares have changed hands as low as $7.07 and as high as $10.65 apiece in the past 52 weeks.
The number of J.C. Penney Co. Inc. (NYSE: JCP) shares short decreased by around 4% in the latest period to almost 129.96 million. Note that short interest has increased in six of the past nine periods, and it was a whopping 42.3% of the struggling retailer’s float most recently. The daily average trading volume decreased sharply during the two-week period, so the days to cover rose from about six to 13.
Some have wondered whether J.C. Penney or Sears will become a penny stock first. The former’s share price rose more than 9% during those two weeks, while the S&P 500 was barely any higher on the most recent settlement date. The stock has been relatively flat since the settlement date and closed most recently at $1.90 a share. Yet, that is more than 27% lower over the past three months. The 52-week low, seen last month, was $1.60, while the 52-week high of $4.75 was reached early this year.