As February began, the federal government shutdown was over and the January employment report was stronger than expected, but ongoing concerns about trade and fears of a recession lingered. It was also a time when bond king Bill Gross retired, high-profile CEO Jeff Bezos revealed a politically motivated blackmail scheme, and the empire he founded abandoned plans to build a second headquarters in New York City.
Judging by the most shorted stocks traded on the New York Stock Exchange between the January 31 and February 15 settlement dates, those sellers were shifting priorities, as moves were mixed with some swings quite sizable. The stock still at the top of the list, Chesapeake Energy, led the decliners, but the biggest swing was the more than 200% gain in the number of Pfizer shares short. It and Encana both pushed their way up the list.
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.
> Shares short: More than 204.57 million
> Change from prior period: −13.7%
> Percentage of float: 18.2
This decline ended three consecutive increases in the number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short. The end of January figure 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 four days to cover all the short positions.
Natural gas inventories shrank less than expected and Chesapeake shares retraced earlier gains during the short interest period. The stock ended those two weeks about 9% lower, though they had been down almost 20% at one point. The S&P 500 saw a gain of less than 3% between the settlement dates.
The stock popped almost 6% in the past week and ended Wednesday at $2.90 a share. That is around 31% 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.
> Shares short: More than 155.95 million
> Change from prior period: +264.8%
> Percentage of float: 2.7
This was by far the greatest level of short interest at Pfizer Inc. (NYSE: PFE) so far this year. In the previous period, less than 43 million shares were short. At the daily average volume on the latest settlement date, it would take about seven days for short sellers to cover their positions.
Pfizer has been considered one of the best dividend stocks for retirees to own. By the end of the first two weeks of February, the share price had retreated around 1%, though it had been down almost 4% earlier in the period. Again, the S&P 500 managed a gain of less than 3% between the settlement dates.
The stock closed Wednesday’s trading at $42.93 a share, after rising more than 2% in the past week. Pfizer’s 52-week low of $34.32 was seen last spring, and the 52-week high of $46.47 was from this past December. Shares are still down less than 2% year to date.
> Shares short: Over 149.81 million
> Change from prior period: +36.0%
> Percentage of float: n/a
The strong run of short interest in the past few periods lifted EnCana Corp. (NYSE: ECA) to number three on the list by the mid-February settlement date. The most recent reading is about double the number of shares short at the beginning of the year. And it would take about three days for sellers to cover their short positions after the latest daily average trading volume increased.
This Canadian energy producer remains a top pick at Merrill Lynch. EnCana’s share price pulled back more than 14% but then almost entirely recovered by the end of the two-week period. The stock climbed a bit further after that.
The shares pulled back fractionally in the past week and closed most recently at $6.89 apiece. That is still more than 19% higher year to date. The 52-week low, which was seen late last year, was $5.00, while the 52-week high of $14.28 was reached last August.