The 6 Most Shorted NYSE Stocks

March 12, 2019 by Trey Thoelcke

After the strong start to the year, the momentum in the big U.S. stock indexes began to slow late in February. Trade concerns and fears of inflation or another recession lingered, Federal Reserve Chair Jerome Powell testified before Congress, the earnings reporting season wound down, and even Warren Buffett himself had a bad day just ahead of the release of his highly anticipated annual letter.

Judging by the most shorted stocks traded on the New York Stock Exchange between the February 15 and February 28 settlement dates, those sellers were cautious overall, as moves were mixed and generally modest. Pharmaceutical giant Pfizer was the standout among the top six, with a sizable reduction in the number of its shares short. Further down list, short sellers piled on rival Eli Lilly, and GE also had a notable decline.

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 204.35 million
> Change from prior period: −0.1%
> Percentage of float: 18.2

After a sizable decline in the previous period, the short sellers took a breather on Chesapeake Energy Corp. (NYSE: CHK) in the latter half of February. That figure is down from the more than 235 million shares short posted at the end of January. At the daily average trading volume on the latest settlement date, it still would take about four days to cover all short positions.

Chesapeake posted better-than-expected quarterly results and an upbeat forecast during the period. The stock ended those two weeks almost 15% higher, most of that gain in the last couple of days of the month. The S&P 500 saw a gain of a little more than 1% between the settlement dates.

The stock dropped more than 13% in the past week and ended Monday at $2.75 a share. That is still 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.

Pfizer
> Shares short:
Around 138.18 million
> Change from prior period: −11.4%
> Percentage of float: 2.4

This notable decline only reclaimed a little of the almost 265% rise in the previous period to by far the greatest level of short interest at Pfizer Inc. (NYSE: PFE) so far this year. At the end of January, less than 43 million shares were short. And at the daily average volume on the most recent settlement date, it would take about six 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 final two weeks of February, the share price had risen about 2%, though it had been up nearly 3% at one point in the period. The shares have continued to retreat since the end of the short interest period.

The stock closed Monday’s trading at $41.50 a share, after pulling back more than 3% 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 down about 5% year to date.

Rite Aid
> Shares short:
More than 126.48 million
> Change from prior period: +1.0%
> Percentage of float: 11.9

Rite Aid Corp. (NYSE: RAD) jumped a couple of spots on the most shorted NYSE stocks list despite this marginal 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 15 days for investors to cover all short positions.

Rite Aid recently said it plans a reverse stock split in order to avoid being delisted from the New York Stock Exchange. The share price had given up about 8% by the latest settlement date, though it had been down more than 9% at one point. The stock retreated further after the end of the month.

The shares closed most recently at about $0.69 apiece, which is less than 3% lower than at the start of the year. They 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.

J.C. Penney
> Shares short:
Over 119.47 million
> Change from prior period: +5.7%
> Percentage of float: 39.6%

J.C. Penney Co. Inc. (NYSE: JCP) also climbed the most-shorted list during the latest two-week period. This gain ended five straight periods of shrinking short interest. It would take about seven days for sellers to cover their short positions after the latest daily average trading volume surged to a year-to-date high.

This struggling retailer posted mixed quarterly results and announced more store closures last month. Its share price spiked more than 25% late in the period but ended the month with a gain of less than 17%. The stock regained its moment after the beginning of this month.

In the past week, the shares are up 14% more and closed most recently at $1.81 apiece. That is around 74% higher year to date. The 52-week low, which was seen late last year, was $0.92, while the 52-week high of $3.54 was reached last April.

Snap
> Shares short:
Nearly 117.31 million
> Change from prior period: −8.2%
> Percentage of float: 17.8

Despite this shrinkage in the number of its shares short, Snap Inc. (NYSE: SNAP) stayed put in its spot on the most shorted list in the most recent period. And it followed a nearly 12% decline in this social media and camera company’s short interest in the prior period. At the end-of-month daily average trading volume, it would take about four days for investors to cover all short positions.

The company posted better-than-expected fourth-quarter results early last month. The shares ended the latest short interest period almost 7% higher, though they had been up more than 12% earlier in those two weeks. The share price increased a bit more after the settlement date.

The shares were last seen trading at $9.96 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 $18.35 a share. The stock now is up more than 80% since the beginning of the year.

Alibaba
> Shares short:
More than 114.73 million
> Change from prior period: +0.5%
> Percentage of float: 4.4

Even with little change in its short interest, Alibaba Group Holding Ltd. (NYSE: BABA) ticked up this list between the settlement dates. And this was the second highest number of its short shares so far this year. At the daily average trading volume on the most recent settlement date, the days to cover figure was eight, up from less than five in the prior period.

Alibaba and Office Depot have announced a partnership. Short sellers watched Alibaba shares jump more than 8% by the end of the month, with most of the gain coming in the middle of the period. Again, the S&P 500 saw a gain of a little more than 1% during the short interest period.

The stock closed at $ 180.41 a share on Monday, which is down from a multiyear high of $211.70 reached last summer. The 52-week low, seen on Christmas Eve, was $129.77 a share. The stock has gained more than 31% since the beginning of 2019.

And the Rest

Rounding out the top 10 were General Electric Co. (NYSE: GE), CenturyLink Inc. (NYSE: CTL), Bank of America Corp. (NYSE: BAC) and Eli Lilly and Co. (NYSE: LLY). Like Pfizer in the prior period, peer Eli Lilly rode its own surge in short interest — about 194% — onto the list of the 10 most shorted NYSE stocks. GE dropped out of the top six with the only short interest decline among these four.

Lingering outside the spotlight of the top 10 at the end of February were Weatherford International PLC (NYSE: WFT), Energy Transfer L.P. (NYSE: ET) and Sprint Corp. (NYSE: S).

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