The overbought markets, along with political and geopolitical uncertainties and the rising concerns about a sizable market correction, prompted some short sellers into action in the first two weeks of this month. There were some big moves among the most shorted stocks traded on the New York Stock Exchange between the April 28 and May 15 settlement dates.
The two energy companies that top this list saw some of the largest upswings here. A surge in short interest also lifted a Brazilian miner back into the top 10. Other changes in the numbers of shares short were more modest, and mostly to the upside.
Note that the top six stocks on the list all had more than 110 million shares short at the end of the most recent settlement period.
Weatherford International
Weatherford International PLC (NYSE: WFT) remained the most shorted NYSE stock with a more than 12% rise in the number of shares short in the first two weeks of this month. That was the second double-digit percentage increase in a row. The nearly 162.51 million shares reported most recently was the highest level of short interest in the past year, and it represented 12.2% of this oil and gas driller’s total float. The days to cover reading ended the period at around six.
Weatherford posted a quarterly net loss at the end of April. Shares were down more than 9% in the two-week period, though they were more than 12% lower at one point. The stock closed most recently at $5.32. That was up handily from the multiyear low of $3.73 from last November, but less than the 52-week high of $7.09 seen back in March.
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 almost 15% to more than 162.03 million shares short, but not enough to push it back to the top of the list. That was 14.9% of the company’s float, though. At the most current daily average, it would take about four days to cover all the short positions.
Merrill Lynch downgraded Chesapeake earlier this month, but was it justified? The stock ended the two weeks almost 6% higher, though it was up more than 9% at one point. The S&P 500 saw a fractional gain in that time. The stock closed most recently at $5.55 a share, which is about 21% lower year to date. Shares have changed hands between $3.93 and $8.20 in the past 52 weeks.
AT&T
The more than 141.75 million AT&T Inc. (NYSE: T) shares short on the most recent settlement date was almost 6% greater than in the end of April. It also was 2.3% of the float, as well was the 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.
Rival Verizon recently outbid AT&T for the 5G assets in Straight Path Communications. In the first two weeks of this month, short sellers watched the share price pull back about 4% and recover just a little. The stock closed on Wednesday at $38.15 a share, which was more than 10% lower than at the beginning of the year. The 52-week trading range for the shares is $36.10 to $43.89.
24/7 Wall St.Sprint
Earlier this month, 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 has decreased in 10 of the previous 13 periods. Most recently its shares short shrank by more than 3 million to around 121.49 million, which was 19.0% of the telecom’s total float. The days to cover dropped from near 12 to about five during those two weeks as the daily average volume surged to a year-to-date high.
Sprint reported a quarterly net loss early this month, and its share price dropped about 14% afterward. It ended the latest short interest period down more than 12%. The stock has recovered a little since then and closed most recently at $8.17. The shares hit a 52-week high of $9.65 back in February, which compares to the 52-week low of $3.46 from almost a year ago.
Ford
After the gains in short interest in the previous three periods, Ford Motor Co. (NYSE: F) short sellers appeared to have had enough. The decline in the first two weeks of this month was about 6%, bringing the reported number of shares short to more than 116.03 million. That represents 3.0% of the total float, and it was the fourth 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 recently announced layoffs, but the shares were not rewarded for it. The stock ended the period down more than 4%, but here too the share price regained some since then. The shares have changed hands between $10.67 and $14.04 apiece in the past year. They were trading at $10.96 on Wednesday’s close, which is more than 9% lower than at the beginning of the year.
J.C. Penney
J.C. Penney Co. Inc. (NYSE: JCP) saw the number of its shares short little changed from the previous period, but the latest reading still was the greatest in the past year. And note that the approximately 110.50 million shares reported totaled a whopping 38.4% of the struggling retailer’s float. The daily average trading volume increased during the period, and the days to cover slipped to about four.
It began to look this month like even the J.C. Penney bulls were finally giving up. Its share price by the end of the two-week short interest period was more than 4% lower, most of that drop early in the month following the latest earnings report. The stock closed most recently at $4.65 a share. The recent 52-week low was $4.17, while the 52-week high of $73.30 was seen last August.
And the Rest
Rounding out the top 10 were CenturyLink Inc. (NYSE: CTL), Bank of America Corp. (NYSE: BAC), Vale S.A. (NYSE: VALE) and General Electric Co. (NYSE: GE). The only decliner here was Bank of America, but a gain of almost 18% pushed Vale back into the top 10 most shorted stocks.
Not far outside the spotlight of the top 10 were Seadrill Ltd. (NYSE: SDRL) and Cobalt International Energy Inc. (NYSE: CIE).
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