October is often a volatile time for the stock market, and this year investors have plenty to worry about, including rising interest rates, weakness in international markets, growing effects of the trade war with China and a mixed bag from corporate earnings, as well as the upcoming elections and the holiday season. All this has the big indexes retreating from all-time highs.
Judging by the most shorted stocks traded on the New York Stock Exchange between the September 28 and October 15 settlement dates, those sellers were cautiously positive. Among the favorite stocks, short interest rose for the most part, but mostly very modestly. The standout was Ford, with a double-digit percentage increase in the number of its shares short during those two weeks.
Note that the six most shorted NYSE stocks had more than 110 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 reported number of Rite Aid Corp. (NYSE: RAD) shares sold short rose more than 3.2 million to 159.07 million or so between the most recent settlement dates, reclaiming a similar drop in the prior period. The most recent figure was 15.4% of the company’s total float, as well as more than 14 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 12 to 11.
Rite Aid shares kept sinking to new 52-week lows during the short interest period. The share price ended the latest settlement period about 17% lower, while the S&P 500 retreated less than 6% in that time. This past week, the stock fell more than 9% but recovered somewhat, and it closed most recently at $1.01 a share, near the 52-week low of $0.98. That was more than 15% lower than 90 days ago. Rite Aid shares have traded as high as $2.55 apiece in the past 52 weeks.
Sitting in the number two spot on the list for the second straight period was Snap Inc. (NYSE: SNAP), which saw the number of its shares short rise less than 1% in the first half of October. The more than 162.25 million shares reported most recently represented 25.3% of the social media and camera company’s total float. At the daily average trading volume in the middle of this month, it would take about five days for investors to cover all short positions.
A leaked memo suggested that Snap could be profitable before long. Yet, the stock ended the short interest period about 13% lower, and it has pulled back further since then. Snap’s share price was last seen at $6.59, which compares to the 52-week low of $6.46 seen earlier this month. The 52-week high, reached early this year, was $21.22 a share. The stock now is down almost 49% in the past 90 days.
The number of J.C. Penney Co. Inc. (NYSE: JCP) shares short increased by more than 4% in the latest period to around 13.75 million. Note that short interest has grown in seven of the past 11 periods, and it was a whopping 46.5% of the department store operator’s float most recently. The daily average trading volume grew during the two weeks, so the days to cover number pulled back from about 10 to eight.
The struggling retailer’s newly appointed chief executive officer got a $6 million signing bonus. It was a bit of a roller-coaster ride for investors during those two weeks, with the share price down more than 7% and up more than 15%, though it ended the period only down a little more than 1%. The stock has pulled back some more since then and closed most recently at $1.43 a share. That is more than 40% lower over the past three months. The 52-week low, seen this week, was $1.38, while the 52-week high of $4.75 was reached early this year.