The Trump rally seemed to weaken as the year wound to its conclusion, while many investors and traders were out for the holidays. Yet with markets still near all-time highs, those short sellers got out of the way of some of the most shorted stocks traded on the New York Stock Exchange between the December 15 and December 30 settlement dates.
Upswings in the numbers of these stocks sold short were fewer than downswings and modest. In the meanwhile, Bank of America, Chesapeake Energy and General Electric all saw double-digit percentage drops in their short interest in the waning days of 2016.
Note that the top six stocks on the list all still had more than 100 million shares short at the end of the most recent settlement period.
Sprint
The short interest decline in the previous three periods continued into last month. Sprint Corp. (NYSE: S) shares short retreated another almost 7% between the most recent settlement dates. The more than 132.42 million shares reported totaled 20.8% of the float. At the most current daily average, it would take about 11 days to cover all the short positions.
Sprint said in the period that it would add 5,000 jobs. Sprint’s share price ended the two weeks almost 8% higher than where it began it, though it was up more than 13% at one point. The share price has climbed about 79% in the past six months and closed most recently at $8.62. The stock hit a 52-week high of $9.00 last week, well up from the 52-week low of $2.18 almost a year ago.
Alibaba
Alibaba Group Holding Ltd. (NYSE: BABA) saw its short interest grow less than 3% to around 110.19 million shares by the end of the month. That was the second lowest number of shares short since August, as well as 4.6% of the float. As of the most recent settlement date, it would take about 13 days to cover all short positions.
Alibaba is chasing Amazon and Microsoft with its cloud services business. Short sellers watched the share price see-saw between the settlement dates and end with about a 1% decline. The stock closed most recently at $96.93, which is more than 18% higher than six months ago. The 52-week trading range is $59.25 to $109.87.
Bank of America
A nearly 22% reduction in Bank of America Corp.’s (NYSE: BAC) number of shares short brought it to the lowest number since September. The more than 108.07 million shares short at the end of the latest period represented 1.1% of the money center bank’s float. The average daily trading volume dropped sharply, but the days to cover remained at less than one.
This bank seems set to benefit from higher rates ahead. Short sellers watched the shares retreat more than 4% in the short interest period, while the S&P 500 slipped about 1% in that time. The stock has changed hands between $10.99 and $23.39 a share in the past year, and it closed at $23.07 on Wednesday.
Vale
The number of Vale S.A. (NYSE: VALE) shares short grew by more than 4.7 million during the period, or almost 5%, to more than 104.36 million. That ended three consecutive periods of shrinking short interest. At the most recent average daily volume, it would take about five days to cover all short positions.
Analysts reacted positively to the recent sale of fertilizer assets to Mosaic. Short sellers watched the share price decrease more than 8% but recover some during the short-interest period. The stock closed most recently at $9.31. That is up almost 82% in the past six months. The share price has ranged from $2.13 to last week’s $9.35 in the past 52 weeks.
Weatherford International
For the second period in a row, the number of Weatherford International PLC (NYSE: WFT) shares short hardly changed from the previous settlement date. The more than 102.61 million shares short on the year’s final trading day represented 10.6% of this oil and gas driller’s total float. At the most recent average daily volume, it would take about six days to cover all short positions.
Shares of this Houston-based company got a boost last month from the announced OPEC production cuts. But they ended the two-week period more than 6% lower, though it was down more than 9% at one point. The stock closed most recently at $5.66. That is down more than 4% from six months ago. The share price has ranged from $3.73 to $8.49 in the past 52 weeks.
Chesapeake Energy
After a more than 10% decline in late November, Chesapeake Energy Corp. (NYSE: CHK) saw its short interest drop sharply again, almost 13%, to nearly 101.60 million shares in the final weeks of last month. That was 11.6% of the total float. Note that short interest was more than 240 million shares a year ago. As of the most recent settlement date, it still would take more than two days to cover all short positions.
The company continued to sell assets last month. The share price increased 8%, but then gave up all that gain, between the settlement dates. The stock has been relatively flat since and closed most recently at $6.91, up handily from the multiyear low of $1.50 early last year. The 52-week high of $8.20 was seen in mid-December.
And the Rest
Rounding out the top 10 were General Electric Co. (NYSE: GE), AT&T Inc. (NYSE: T), Seadrill Ltd. (NYSE: SDRL) and Ford Motor Co. (NYSE: F). Seadrill was the only one here that saw the number of its shares short swell in the two weeks. The drop at GE was more than 34%, to the second lowest level of short interest in the past year.
Note that J.C. Penney Co. Inc. (NYSE: JCP) saw a double-digit percentage surge in its short interest, but that wasn’t enough to lift the stock back into the top 10, where it has resided in the past. Also, lingering just outside this top 10 list in the period were Abbott Laboratories (NYSE: ABT) and Host Hotels & Resorts Inc. (NYSE: HST).
The most shorted Nasdaq stocks include Sirius XM, Intel and AMD.
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