Healthy corporate earnings seemed to be enough to continue the eight-year old bull market in late April, with major indexes near all-time highs despite political and geopolitical uncertainties that had oil prices in retreat. The moves among the most shorted stocks traded on the New York Stock Exchange revealed that short sellers had one or two clear favorites between the April 13 and April 28 settlement dates.
Most clearly that was oilfield services company Weatherford International, which reclaimed its spot on the top of the list during the most recent period with a sharp rise in the number of its shares short. Likewise, GE saw a handy gain in short interest and clung to the bottom of the top 10.
Note that the top six stocks on the list all had more than 115 million shares short at the end of the most recent settlement period.
Weatherford International
Weatherford International PLC (NYSE: WFT) reclaimed its title as the most shorted NYSE stock with a more than 10% rise in the number of shares short in the final two weeks of this month. The more than 144.87 million shares reported most recently was the highest level of short interest in the past year, and it represented 14.9% of this oil and gas driller’s total float. The days to cover reading ended the period at around six.
Weatherford was a Deutsche Bank top pick during the period. The stock ended the two weeks more than 4% lower, though it was down almost 10% at one point. The S&P 500 saw a more than 2% gain in that time. The stock closed most recently at $5.07 a share, which still is marginally higher year to date. Shares have changed hands between $3.73 and $7.09 in the past 52 weeks.
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Chesapeake Energy
The number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short has risen in nearly every period so far this year. It increased most recently by more than 4% to more than 140.97 million shares short, not enough to keep it at the top of the list. That was 15.8% of the company’s float, though. At the most current daily average, it would take about four days to cover all the short positions.
The short interest period ended before Chesapeake reported better-than-expected earnings. Shares were down more than 10% by the end of the month, though the quarterly results have helped little since. The stock closed most recently at $5.40. That was up handily from the multiyear low of $3.56 from last summer, but less than the 52-week high of $8.20 seen back in mid-December.
AT&T
The nearly 133.96 million AT&T Inc. (NYSE: T) shares short on the most recent settlement date was marginally greater than in the middle of April. It also was 2.2% of the float, and it was the second highest level of short interest in at least a year. As of the latest settlement date, it would take about six days to cover all short positions.
AT&T was one of our top defensive picks against a possible correction this summer. In the latter two weeks of last month, short sellers watched the share price drop less than 2%, though it has retreated further since that time. The stock closed on Tuesday at $38.22 a share, which was around 10% lower than at the beginning of the year. The 52-week trading range for the shares is $36.10 to $43.89.
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Sprint
Like rival AT&T, Sprint Corp. (NYSE: S) saw one of the few short interest declines among the most shorted NYSE stocks. And note that the number of its shares short interest decreased in nine of the previous 12 periods. Most recently its shares short shrank by almost 3 million to around 125.27 million, which totaled 19.6% of the telecom’s float. The days to cover dropped from near 14 to about 11 during those two weeks.
Sprint signaled a potential shift in focus early last month, and its share price ended the latest short interest period with a gain of about 9%. However, the stock lost all that gain and more since then and closed most recently at $7.90. The shares hit a 52-week high of $9.65 back in February, which compares to the 52-week low of $3.39 from almost a year ago.
Ford
After the big gains in short interest in the previous two periods, Ford Motor Co. (NYSE: F) shorts took a bit of a breather. The gain in the final two weeks of last month was less than 2%, bringing the reported number of shares short to almost 123.48 million. That represents 3.2% of the total float, and it was the third time this year that short interest was more than 100 million shares. It still would take three days to cover all short positions, as of the latest settlement date.
Ford’s most recent quarterly results managed to exceed low expectations, but the shares were not rewarded for it. Still, the stock ended the period up more than 3%, but here too the share price pulled back in early May. The shares have changed hands between $10.90 and $14.04 apiece in the past year. They were trading at $11.16 on Tuesday’s close, which is about 8% lower since the beginning of the year.
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Alibaba
Alibaba Group Holding Ltd. (NYSE: BABA) saw its short interest essentially flat in the previous two periods, but the latest reading showed a gain of nearly 3%. The approximately 115.27 million shares reported most recently was the greatest number of shares short since early this year, and it totaled 4.6% of the float. The daily average volume changed little during the period, and the days to cover remained about 12.
Recently, Alibaba has been in a bidding war for Moneygram. Its share price by the end of the two-week short interest period was more than 4% higher, and the stock has kept climbing since then. It closed most recently at $120.00 a share, a new 52-week high. The 52-week low of $73.30 was seen last summer.
And the Rest
Rounding out the top 10 were J.C. Penney Co. Inc. (NYSE: JCP), CenturyLink Inc. (NYSE: CTL), Bank of America Corp. (NYSE: BAC) and General Electric Co. (NYSE: GE). GE saw a double-digit percentage gain in its short interest, while Bank of America saw the only decline in the number of shares short among these four.
After short sellers yielded on Vale S.A. (NYSE: VALE) earlier this year, now it seems to be making a new run at the top 10. We’ll have to wait and see whether it manages to elbow GE out of the way this month.
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