Summer is in full swing, and judging by the moves in the six most shorted stocks traded on the New York Stock Exchange between June 30 and July 14, short sellers are not sure on what to make of major indexes remaining near all-time highs even though the bull run is well more than eight years old now. There were short interest swings in both directions during those two weeks, but they were mostly mild.
One of the most popular money center banks stood out with a notable rise in the number of shares short, following the results of the big bank stress tests. On the other hand, short sellers continued to shy away from one of the big three Detroit automakers. And an iconic conglomerate managed to slip out of the top 10 by the middle of the month.
Note that the top six stocks on the list all had more than 120 million shares short at the end of the most recent settlement period.
Chesapeake Energy
The number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short has risen in nearly every period so far this year, and it remains the most shorted NYSE stock. Short interest increased most recently by only little more than 1% to nearly 205.60 million shares. That was 23.0% of the company’s float. At the latest posted daily average trading volume, it would take about seven days to cover all the short positions.
One key analyst projected ongoing weakness for Chesapeake and sector peers during the most recent period. Its share price ended the two weeks about 2% lower, though it was down more than 8% at one point. The S&P 500 saw a more than 1% rise in that time. The stock closed most recently at $4.85 a share, which is about 31% lower year to date. Shares have changed hands between $4.38 and $8.20 in the past 52 weeks.
AT&T
The more than 158.22 million AT&T Inc. (NYSE: T) shares short on the most recent settlement date was almost 6% higher than at the end of June, lifting it into the number two spot on the list. Also it represented 2.6% of the float and was the highest level of short interest in at least a year. As of the middle of this month, it would take about eight days to cover all short positions.
A recent AT&T downgrade cited concerns about the dividend and the Time Warner acquisition. In the first two weeks of July, short sellers watched the share price drop by nearly 4%. The stock closed most recently at $36.22 a share, which was less than 15% lower than at the beginning of the year. The 52-week trading range for those shares is $35.81 to $43.50.
Weatherford International
Weatherford International PLC (NYSE: WFT) slips to the third spot on the list even though the number of shares short hardly changed in the initial two weeks of this month. It was another pause following the two double-digit percentage increases in a row back in late April and early May. The more than 153.76 million shares reported most recently represented 15.8% of the total float. The days to cover reading ended the period at around seven.
This oil and gas driller was hitting 52-week lows earlier this month. Its shares were more than 8% higher at the end of the two-week period, despite being down more than 8% at one point. The share price was last seen at $4.34. That was up from the recent multiyear low of $3.39, but handily less than the 52-week high of $7.09 from back in March.
Alibaba
Alibaba Group Holding Ltd. (NYSE: BABA) saw the number of its shares short tick up a little more than 1% from the previous period, though it was to the greatest number so far this year. And note that the more than 140.80 million shares reported totaled 5.5% of the Chinese e-commerce giant’s float. The daily average volume shrank during the period, so the days to cover jumped from almost six to around 12.
Shares of Alibaba hit a new all-time high during the latest short interest period. The share price rose more than 7% in the first half of July, and it has added more than 11% since then. The stock closed most recently at $152.44, which is more than 73% higher year to date. The 52-week low of $81.94 was seen about a year ago, and the 52-week high of $156.41 last week.
Ford
For the third period in a row, short sellers shied away Ford Motor Co. (NYSE: F). The latest decline in short interest was about 4%, bringing the reported number of shares short to around 123.70 million. That represents 3.2% of the total float, and it was the eighth time this year that short interest was more than 100 million shares. It still would take four days to cover all short positions, as of the latest settlement date.
Though the automaker announced fresh recalls at the end of June, its share price ended the latest settlement period more than 4% higher. However, the stock has given up all that gain in the past week and closed most recently at $11.27. That is about 7% lower than at the beginning of the year. The shares have changed hands between $10.67 and $13.99 apiece in the past year.
Bank of America
The number of Bank of America Corp. (NYSE: BAC) shares short reversed course and increased sharply again in the first two weeks of this month. Almost 123.94 million shares were short, after a rise of more than 9% by mid-month. That represented 1.2% of the money center bank’s total float. But the average daily trading volume fell to a 52-week low in the period, pushing up the days to cover to more than two.
Bank of America received approval for its shareholder return plans after the 2017 results of the Comprehensive Capital Analysis and Review (CCAR). Though its shares ended the two weeks fractionally lower, they were up more than 2% a couple of times. The stock closed most recently at $24.48 a share. That is more than 10% higher since the beginning of the year. Bank of America shares have a 52-week trading range of $114.09 to $25.80.
And the Rest
Rounding out the top 10 were J.C. Penney Co. Inc. (NYSE: JCP), CenturyLink Inc. (NYSE: CTL), Sprint Corp. (NYSE: S) and Pandora Media Inc. (NYSE: P). Pandora is the newest member of the top 10, as a mild bump in the number of shares short added to the larger gain seen in late June. General Electric Co. (NYSE: GE) dropped out of the top 10 most shorted NYSE stocks in the most recent period. Of more note, perhaps, is that the short interest in Rite Aid Corp. (NYSE RAD) doubled in those two weeks. Time will tell if it rises into the top 10.
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