Short interest Exxon Mobil Corp. (NYSE: XOM) rose 18.6% at 49.64 million shares during the two-week period. That represents 1.1% of oil & gas company’s float. Exxon reported third-quarter results on October 31st and earnings per share were down 14% and net income was down 18%. Lower crude oil pricing, continuing low natural gas pricing, and a sharp decline in downstream earnings share the blame. And predictions for even lower crude oil prices could bring in even more shorts. One positive note was an upgrade from Hold to Buy at Argus and we noted that the stock has an implied upside of 15% in the next 12 months.
Wal-Mart Stores Inc. (NYSE: WMT) saw short interest rise 18.1% to 26.16 million shares during the two-week period to October 31st. That represents 1.7% of the mega-retailer’s float. Walmart will announce third-quarter results on Thursday and current estimates call for earnings per share of $1.13 on revenues of $116.79 billion. The outlook for the holiday shopping season is modest at best, and Walmart needs a lot of help getting its sales mojo back. Like Exxon, more short interest could be brewing in the current two-week period.
Verizon Communications Inc. (NYSE: VZ) saw a rise of 10.9% in short interest, to 70.29 million shares, or 2.5% of the company’s float. Verizon reported third-quarter results on October 17th and shares jumped about $2.00 before settling again at an increase of about $1.00. Short interest here is very likely a valuation call with some shorts also factoring in a likely slowdown in sales during the holiday season. The shares are up more than 17% in the past 12 months and the stock price is much closer to its 5-year peak (posted in April) than to its low.
Short interest in DirecTV (NASDAQ: DTV) is up 17.6% at 14.67 million shares for the latest two-week period. That’s 2.7% of the satellite company’s float. DirecTV did not announce earnings until November 5th, but the announcement didn’t move the stock much. Like Verizon, DirecTV’s shares are very near their 5-year peak set in July. The shorts believe that the stock’s value can only fall from here, even though the forward P/E ratio is right around 11. The implied upside to today’s trading price is less than 8%, so the shorts may have a point.
eBay Inc. (NASDAQ: EBAY) saw short interest rise 13.7% to 17.04 million shares in the two weeks to October 31st. That’s 1.4% of the company’s float. eBay’s strategy has been to downplay its auction sales and put more emphasis on mobile e-commerce. That has worked well, but growth has slowed, and when the company reported earnings on October XXth, the CFO proclaimed that the company had “cautious outlook” for the holiday season after e-commerce sales had slowed “considerably” in the fourth quarter. That’s enough to get the short sellers to form a line.
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