After a rough fourth quarter, with a particularly brutal December, things seemed to be looking up for stock investors in the new year, even with the bull market nearing 10 years old and economic numbers somewhat shaky. Judging by the most shorted stocks traded on the Nasdaq between the January 15 and January 31 settlement dates, those sellers were focused on a few favorites, as other moves were mixed but more modest.
Among those stocks at the top of the list, Sirius XM and Caesars Entertainment, had double-digit percentage upswings during the final weeks of last month. Meanwhile, short sellers notably yielded on Zynga and Mattel.
Note that still just three Nasdaq stocks had more than 100 million shares short as of the most recent settlement date.
> Shares short: More than 275.46 million
> Change from prior period: +10.8%
> Percentage of float: 23.5
This was the third straight period with an increase in Sirius XM Holdings Inc. (NASDAQ: SIRI) shares held short, and so this was again the highest level of short interest in the past year. The average daily volume picked up somewhat from the prior period, but the days to cover slipped from 10 to about nine.
We noted during the period that Sirius was among some bargain stocks with huge upside potential. Its stock climbed about 3% but then ended the final two weeks of last month down more than 2%. The Nasdaq climbed more than 4% between the settlement dates.
Sirius stock closed at $5.86 a share on Monday, which is about 4% higher than at the beginning of the year. The 52-week low of $5.48 was seen just before and again after Christmas, while the multiyear high of $7.70 was reached last summer.
> Shares short: More than 129.08 million
> Change from prior period: +24.8%
> Percentage of float: 23.6
This most recent level of short interest in Caesars Entertainment Corp. (NASDAQ: CZR) lifted the stock one place on the list, and it was the greatest in at least a year. There have been more than 100 million shares short in nine of the past 11 periods. At the latest average daily volume, the days-to-cover figure remained a little more than four.
We recently identified Caesars as a “fallen angel” stock with huge upside potential. Its share price ended the latter two weeks of last month more than 4% higher, even though they had been down more than 2% earlier in the period. Since that time, shares have been climbed further.
The stock ended Monday’s session at $9.40 per share, which represents a gain of more than 36% from the start of this year. Its 52-week trading range is $5.84 to $13.54, and that low was seen during the Christmas Eve market sell-off.
> Shares short: More than 119.77 million
> Change from prior period: −7.1%
> Percentage of float: 12.1
Advanced Micro Devices Inc. (NASDAQ: AMD) slips to number three on this list as it lost over 9.1 million shares short in the period. And though the average daily volume increased to its highest level since October, the number of days it would take to cover all short positions is still about one.
AMD’s fourth-quarter results were largely in line with expectations, but it was the guidance that excited investors. Short sellers watched the share price rise more than 19% during those two weeks, much of the gain coming after the earnings report.
The stock closed trading most recently at $22.96 a share, which is more than 22% higher year to date, as well as down from last September’s 52-week high of $34.14. Shares have changed hands at as low as $9.04 apiece in the past year.
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