With the holiday shopping season looking strong and tax reform seeming all but certain earlier this month, how were short sellers positioning themselves for the end of the year? Judging by the most shorted stocks traded on the New York Stock Exchange between the November 30 and December 15 short interest settlement dates, they were cautious. The number of shares short in most of these stocks shrank.
For the second period in a row, the most notable rise in short interest was seen in Bank of America. On the other hand, the number of Weatherford shares short shrank by a double-digit percentage, leading the decliners at the top of the list.
Note that the six most shorted NYSE stocks all had more than 130 million shares short at the end of the most recent settlement period. In fact, all the top 10 had short interest of more than 100 million shares.
AT&T
AT&T Inc. (NYSE: T) once again tops the list, despite more than an 8% drop to more than 193.37 million shares short on the most recent settlement date. That was the third consecutive decline, down from a year-to-date high over 230 million. The latest reading represented 3.2% of the company’s float. As of the middle of this month, it would take around six days to cover all short positions, despite a slight retreat in the average daily trading volume.
AT&T is looking forward to the next generation of broadband. In the initial two weeks of December, investors watched the share price rise almost 5%, and it continued to swell afterward. The stock did hit a new 52-week low of $32.55 per share early last month but ended Wednesday’s trading at $38.89 a share. The latest share price is more than 3% higher than six months ago. AT&T shares reached a 52-week high of $43.03 per share back at the beginning of this year.
Chesapeake Energy
The number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short has risen in most periods this past year, but in the latest period it saw a decline of about 2% to more than 165.92 million. That represented 18.5% of the oil and gas company’s float. At the posted daily average trading volume on the settlement date, it would take about six days to cover all the short positions.
We wondered last month whether Chesapeake has fallen into a death spiral. While its share price ended the two weeks more than 14% lower, it has recovered more than 6% since then. The S&P 500 saw about a 2% gain between the settlement dates. The stock closed Wednesday’s trading at $3.88 a share, which is about 19% lower than six months ago. The 52-week low of $3.41 was seen back in October. Shares have changed hands as high as $7.62 in the past year.
Rite Aid
The reported number of Rite Aid Corp. (NYSE: RAD) shares sold short retreated more than 2% to more than 162.24 million as of the most recent settlement date. That followed about a 7% decline in the previous period, and it was the 10th straight period with more than 100 million shares short. The latest figure was 15.4% of the retailer’s total float. The average daily trading volume decreased in the most recent period, so the days to cover rose from five to eight.
Rite Aid has continued to suffer after its failed merger with Walgreens. Its shares ended the first two weeks of this month more than 5% lower, though it was down more than 12% earlier in the period. The stock closed most recently at $2.01 a share, which was more than 46% lower than it was six months ago. Rite Aid shares have changed hands between $1.38 and $8.77 in the past year.
Bank of America
Bank of America Corp.’s (NYSE: BAC) short interest in the latest two-week period jumped more than 11% to over 151.13 million shares. That was the second double-digit percentage rise in a row, and it represents 1.6% of the total float. It was also the seventh consecutive period in which the number of shares short was more than 100 million. It would take at least two days to cover all short positions, as of mid-December.
This money center bank recently has seen some price target hikes from analysts. Its share price ended the latest settlement period with a gain of almost 3%, most of that gain coming in the beginning of the month. The stock closed most recently at $29.72 a share. That is more than 27% higher than six months ago. The shares have changed hands between $ 21.77 and $30.03 apiece in the past year.
Weatherford
Weatherford International PLC (NYSE: WFT) slipped a couple of spots down the list as the number of its shares short dwindled more than 12% in the first two weeks of December. That was a drop from the highest level of short interest so far this year. The more than 147.69 million shares reported most recently represented 15.1% of the total float. The days to cover reading ended the period at around eight as the average daily volume declined again.
At least one analyst recently anticipated that the Weatherford share price could almost double. Short sellers watched the share price jump about 10% but give up almost all that gain by the latest settlement date. In those two weeks, the Dow Jones Industrial Average saw a gain of more than 2%. The stock was last seen trading at $4.05 a share, up from a 52-week low of $3.08 in late November. The 52-week high, from last March, was $7.09.
J.C. Penney
The number of J.C. Penney Co. Inc. (NYSE: JCP) shares short grew from over 133.78 million in the previous period to less than 136.58 million. That was a rise from the lowest short interest since August, as well as a whopping 47.1% of the struggling retailer’s float. Note too that short interest has been above 100 million for 18 periods in a row. The daily average trading volume also increased a bit during the period, but the days to cover remained about nine.
J.C. Penney continues to search for the elusive turnaround. Its share price rose more than 16% but gave up much of that gain during the short interest period. It continued to retreat afterward and closed most recently at $3.23 a share. That is down about 33% from six months ago. The 52-week low, seen last month, was $2.35, while the 52-week high of $8.80 was reached almost a year ago.
And the Rest
Rounding out the top 10 were Ford Motor Co. (NYSE: F), General Electric Co. (NYSE: GE), Alibaba Group Holding Ltd. (NYSE: BABA) and Snap Inc. (NYSE: SNAP). The only short interest gain here was at Ford, but it was a modest gain. The largest downswing in the other three was seen at Snap.
Short sellers backed off of Sprint Corp. (NYSE: S) too, so it remains outside the spotlight of the top 10 most shorted NYSE stocks. Not far away are Vale S.A. (NYSE: VALE) and Transocean Ltd. (NYSE: RIG).
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