Ever since the parabolic explosion of GameStop shares higher, much of which was due to the massive short interest, aggressive traders have been scouring the data looking for companies with large short interest, hoping to catch the next parabolic move. While they may indeed find the holy grail, it may be a better idea to find out what stocks hedge funds are shorting the most.
A new Jefferies research report dissects hedge fund holdings after the end of the quarter, and it includes a list of stocks that the top funds are shorting the most. They are hardly the kind of names the WallStreetBets crew is screening to pounce on for a massive short squeeze. In fact, they are some of the top companies in their respective sectors, and they look like great ideas for aggressive growth traders.
The tailwind for these stocks could arrive sooner rather than later, if the companies can deliver solid first-quarter results and have some positive forward guidance. Then it is possible they could see many long accounts buying, which would probably get the hedge fund shorts to do some covering.
Here are the five stocks in the order according to the size of short position at the hedge funds, and all are rated Buy at many top Wall Street firms. It is still important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
This has been one of the most talked-about companies over the past five years, and it was a short seller’s nightmare until recently. Tesla Inc. (NASDAQ: TSLA) designs, develops, manufactures, leases and sells electric vehicles, as well as energy generation and storage systems, in the United States, China and elsewhere.
Tesla’s Automotive segment offers electric vehicles, as well as sells automotive regulatory credits. It provides sedans and sport utility vehicles through direct and used vehicle sales, operates a network of Tesla Superchargers and offers in-app upgrades and purchase financing and leasing services. This segment is also involved in the provision of non-warranty after-sales vehicle services, sale of used vehicles, retail merchandise and vehicle insurance, as well as sale of products through its subsidiaries to third party customers. It provides services for electric vehicles through its company-owned service locations, and Tesla mobile service technicians, and vehicle limited warranties and extended service plans.
The Energy Generation and Storage segment engages in the design, manufacture, installation, sale and leasing of solar energy generation and energy storage products and related services to residential, commercial and industrial customers and utilities through its website, stores and galleries, as well as through a network of channel partners. This segment also offers service and repairs to its energy product customers, including under warranty, and various financing options to its solar customers.
The company noted late last Friday that first-quarter deliveries totaled 184,800 vehicles, beating the FactSet consensus estimate of 168,000. Tesla said it produced just over 180,000 vehicles in the period. Sales of its Model 3 sedans and Model Y compact SUVs came to 182,780. The consensus forecast was for 122,600 Model 3s and about 10,000 Model Ys sold.
Mizuho has a Buy rating and a $775 price target. The consensus target is just $619, and Tesla stock closed on Wednesday at $670.97.