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 New York Stock Exchange between the January 15 and January 31 settlement dates, those sellers were shifting priorities, as moves were mixed but some swings quite sizable.
Among stocks at the top of the list, Bank of America and General Electric led the decliners with double-digit percentage downswings. On the other hand, short sellers moved on Ford and CenturyLink in a big way.
Note that all the top 10 most shorted NYSE stocks had readings of more than 100 million shares as of the most recent settlement date.
Chesapeake Energy
> Shares short: More than 236.98 million
> Change from prior period: +6.4%
> Percentage of float: 26.5
After two consecutive surges in the number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short, this further gain kept this oil and gas company in its spot at the top of the list. This was the greatest level of short interest in the past year. At the posted daily average trading volume on the latest settlement date, it would take about six days to cover all the short positions.
Natural gas inventories helped reverse the year-to-date uptrend in Chesapeake shares during the short interest period. The share price rose almost 6% but ended those two weeks with a gain of only about 1%. The S&P 500 saw a gain of more than 4% between the settlement dates.
The stock has retreated since the end of January, and it ended Monday at $2.40 a share. That still is around 10% higher year to date. Chesapeake Energy shares have changed hands as high as $5.60 apiece and as low as $1.71 each over the past year.
Snap
> Shares short: More than 144.97 million
> Change from prior period: +4.1%
> Percentage of float: 25.2
Another modest gain in the number of its shares short was enough to lift Snap Inc. (NYSE: SNAP) into second place on the list. And this was the highest level of social media and camera company’s short interest in at least a year. At the end-of-month daily average trading volume, it would take about six days for investors to cover all short positions.
The stock received an analyst upgrade in wake of news of the retirement of its chief financial officer. The shares ended the latest settlement period more than 3% higher, but this was after being down nearly 13% around the time of that management change announcement.
The shares were last seen trading at $8.99 apiece. That compares to the 52-week low of $4.82 reached back in December. The 52-week high, seen about a year ago, was $21.22 a share. The stock now is up about 58% since the start of the year.
General Electric
> Shares short: More than 117.19 million
> Change from prior period: −22.5%
> Percentage of float: 1.4
General Electric Co. (NYSE: GE) dropped to third place, by just one spot despite the plunge in the number of its short shares in the latter two weeks of last month. Note that this was the lowest level of short interest since last September. The daily average trading volume shrank somewhat during the latest period, but the days to cover remained at less than one.
GE posted disappointing quarterly results at the end of the month. Yet, the shares ended the two weeks more than 15% higher, with most of that gain coming after the release of the earnings report. In the latter two weeks of last month, the Dow Jones industrial average rose almost 5%.
GE’s shares were last seen trading at $10.03, which is up from a multiyear low of $6.66 reached in the first half of December. The 52-week high, seen last spring, was $15.59 a share. The stock has gained more than 26% since the beginning of 2019.
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