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.
> Shares short: Nearly 127.78 million
> Change from prior period: −11.9%
> Percentage of float: 21.6
This shrinkage in the number of its shares short allowed Snap Inc. (NYSE: SNAP) to slip a couple of places on the list. The prior figure was the highest level of social media and camera company’s short interest in at least a year. At the mid-month daily average trading volume, it would take about three days for investors to cover all short positions.
The company posted better-than-expected fourth-quarter results between the settlement dates. The shares ended the latest short interest period more than 34% higher, almost all that gain coming in the wake of the earnings report.
The shares were last seen trading at $9.81 apiece. That compares to the 52-week low of $4.82 reached back in December. The 52-week high, seen almost a year ago, was $18.51 a share. The stock now is up more than 77% since the start of the year.
> Shares short: Almost 125.96 million
> Change from prior period: +7.5%
> Percentage of float: 1.5
General Electric Co. (NYSE: GE) also slipped down the list despite the gain in the number of its short shares in the first two weeks of this month. Note that the previous reading was the lowest level of short interest since last September. At the daily average trading volume on the most recent settlement date, the days to cover remained at less than one.
We recently identified GE as a “fallen angel” stock with huge upside potential. The shares ended the two weeks about 10% higher, though it had been up over 13% earlier in the period. In the initial two weeks of this month, the Dow Jones industrial average rose more than 3%.
GE’s shares were closed at $10.88 on Wednesday, which is up from a multiyear low of $6.40 reached in the first half of December. The 52-week high, seen last spring, was $14.99 a share. The stock has gained more than 49% since the beginning of 2019.
> Shares short: More than 125.29 million
> Change from prior period: +12.5%
> Percentage of float: 11.9
Rite Aid Corp. (NYSE: RAD) returns to the top six most shorted NYSE stocks with this notable gain. The latest reading was the greatest number of shares short so far this year. At the daily average volume during the most recent period, it would take about 10 days for investors to cover all short positions.
Rite Aid plans a reverse stock split in order to avoid being delisted from the New York Stock Exchange. Short sellers watched its share price bounce from down more than 8% to up over 3% but end by the latest settlement date only fractionally lower. The stock has retreated since then.
It closed most recently at about $0.76 a share, which is around 31% lower than 90 days ago. The shares have changed hands as low as $0.60 and as high as $2.12 apiece in the past 52 weeks, with that low posted just after last Christmas.
And the Rest
Rounding out the top 10 were Alibaba Group Holding Ltd. (NYSE: BABA), J.C. Penney Co. Inc. (NYSE: JCP), CenturyLink Inc. (NYSE: CTL) and Bank of America Corp. (NYSE: BAC). Alibaba is the only one of these that saw an increase in short interest in those two weeks. CenturyLink is the only one that was not in the top six in the prior period.
Lingering outside the spotlight of the top 10 most shorted NYSE stocks was Sprint Corp. (NYSE: S), Ford Motor Co. (NYSE: F) Energy Transfer L.P. (NYSE: ET) and Weatherford International PLC (NYSE: WFT).