Short sellers got out of the way as AT&T’s merger with DirecTV wound to a close, but the big drop in short interest was not enough to remove AT&T from the list of the most shorted stocks trading on the New York Stock Exchange between the July 15 and July 31 settlement dates. However, Sprint and Transocean both saw significant increases in the numbers of their shares short.

Note that the top six most shorted NYSE stocks all had more than 110,000 shares short at the end of the most recent two-week settlement period.

There was about a 2% rise in the number of Vale S.A. (NYSE: VALE) shares short, the third consecutive period of growing short interest. The end of the month reading was around 215.85 million shares, but that was down from a year-to-date peak of nearly 250,000 back in April. At the current average daily volume, it would take around seven days to cover all short positions. A second-quarter earnings beat failed to impress. Vale shares ended the two-week short-interest period more than 7% lower, while the S&P 500 was essentially flat in that time. Vale closed most recently at $5.32, in a 52-week trading range of $4.91 to $14.12.

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After rising since the end of May, short interest in Chesapeake Energy Corp. (NYSE: CHK) added another 3.7% to around 201.34 million shares late last month. That was 30.7% of the company’s float, and the days to cover slipped to about eight. The stock caught an upgrade after the period ended, even though the share price dropped about 23% between the settlement dates. It has recovered a little since and closed at $8.21 on Tuesday. The 52-week high of $27.24 was reached almost a year ago, and the $6.85 low was seen last week.
Petróleo Brasileiro S.A. (NYSE: PBR), better known as Petrobras, saw the number of its shares short advance about 1% in the two weeks to more than 139.56 million. The days to cover was about four. The year-to-date peak short interest of around 146,000 shares was reached in April. Petrobras got some relief in court earlier in the month. Shares pulled back more than 21% in the period, despite struggling to recover a bit late in the month. The stock ended most recently at $6.25, down more than 14% year to date. In the past year, shares have traded between $4.90 and $20.94.

The number of AT&T Inc. (NYSE: T) shares short plunged in the final weeks of the month from more than 301.81 million to around 130.96 million. That was about 2.1% of the float, as well as the lowest level of short interest in more than a year. It would take about three days to cover all short positions, down from more than 10 days at the previous settlement date. AT&T also posted an earnings beat during the period, but shares were marginally lower by the end of the month. The stock closed most recently at $34.65, which was up a little more than 3% from the beginning of the year. The 52-week trading range is $32.07 to $36.45.

Sprint Corp.’s (NYSE: S) short interest grew more than 16% to more than 127.39 million shares in the latter two weeks of the month. That was 16.0% of the float and the largest number of shares short in the past year. The days to cover ticked up to about five. Ahead of the second-quarter earnings report, short sellers watched the share price retreat more than 16% in the two-week period. Shares closed at $3.85 Tuesday, in a 52-week range of $3.10 to $7.15. The stock is down more than 7% year to date.

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The number of Transocean Ltd. (NYSE: RIG) shares short swelled to around 117.72 million from more than 107.44 million in the period, or to 32.4% of the total float. That was the fifth period in a row of rising short interest. The days to cover was about eight. We noted Transocean’s low price-to-book value in late July. Shares ended the two weeks more than 12% lower. They have pulled back almost 8% more since, closing at $14.49 on Tuesday. Shares have traded between $12.08 and $39.69 in the past 52 weeks.

Rounding out the top 10 were Peabody Energy Corp. (NYSE: BTU), Ford Motor Co. (NYSE: F), J.C. Penney Co. Inc. (NYSE: JCP) and General Electric Co. (NYSE: GE). Of these, only J.C. Penney had a decline in short interest in the final weeks of the month. The number of shares short in Avon Products Inc. (NYSE: AVP) shrank too, allowing it to drop from the top 10.

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