When the first-quarter earnings reporting season kicked off in the middle of last month, it looked at first like the overall solid results might provide a boost for the faltering markets. But the results were not enough to overcome concerns about rising interest rates and potential trade wars. The big U.S. indices had slipped by the end of the month.
Judging by the most shorted stocks traded on the New York Stock Exchange between the April 13 and April 30 settlement dates, those sellers were becoming more discriminating, focusing a few favorites. That included in particular AT&T, with unimpressive quarterly results helping it reclaim the title of the most shorted NYSE stock. The former top of the heap, Chesapeake Energy, also saw a bump in the number of shares short, but short interest in the rest of the top six declined in the latter weeks of April.
Note that the six most shorted NYSE stocks still had more than 125 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) regained its place in the number one spot with a more than 12% surge in its shares short as of the most recent settlement date. The latest reading of nearly 170.96 million was not far off the year-to-date high of over 193 million shares. Note that the short interest had been shrinking in most recent periods. The most recently reported figure represented 3.1% of the company’s float. As of the end of last month, it would take around five days to cover all short positions, after the average daily trading volume increased notably.
AT&T’s latest quarterly results drove investors to the exits. The entire 7% or so decline in the stock in the latter two weeks of April came in the wake of that earnings report, and shares have retreated more since then. They ended trading on Wednesday at $31.40 a share, which is down more than 18% year to date. AT&T has changed hands between $31.17 and $39.80 a share in the past 52 weeks.
Chesapeake Energy
Though the number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short grew more than 4% in the most recent period, this oil and gas company slipped to second place on the list. The reported short interest of nearly 191.99 million shares was 21.4% of the total float, though that was the second time since mid-February that the total was less than 200 million. At the posted daily average trading volume on the settlement date, it would take about seven days to cover all the short positions.
Chesapeake reported better-than-expected quarterly earnings during the short interest period. Its share price ended those two weeks more than 4% lower than where it began, though it has more than recovered since then. The S&P 500 was down about 1% between the settlement dates. The stock ended trading at $3.26 a share on Wednesday, which is around 20% lower year to date. Shares have changed hands as high as $3.33 and as low as $2.86 in the past year.
General Electric
Back in March, General Electric Co. (NYSE: GE) saw the number of its shares short jump nearly 14% to a year-to-date high, and short sellers have been slowly loosening their grip since then. The more than 146.86 million shares reported most recently was down more than 2% for the period and represented 1.7% of the conglomerate’s total float. The daily average trading volume grew somewhat, but the days to cover reading ended the month still at about two.
An independent research firm sees big changes coming for GE that could boost shares more than 40%. The stock ended the short interest period almost 5% higher, though it was up twice that much at one point. In those two weeks, the Dow pulled back about 2%. GE’s share price was last seen at $14.62, which compares with a 52-week low of $12.73 from back in March. The 52-week high, which was reached last summer, was $29.47 a share. The stock now is more than 18% lower year to date.
Weatherford
Weatherford International PLC (NYSE: WFT) remains in the third spot on the list though the number of its shares sold short dropped almost 12% in the final two weeks of April. There had been little change in its short interest in the prior two periods. The more than 146.83 million shares reported most recently represented 14.9% of the total float. The days to cover reading ended the two weeks at around six, down from the prior eight.
Some still see big upside potential in Weatherford stock. Short sellers watched the share price rise more than 13% by the end the settlement period, despite being down about 5% at one point. The stock closed most recently at $3.37 a share. That’s up from a 52-week low of $2.07 in early April. The 52-week high, seen almost a year ago, was $5.48. The stock is still down more than 2% year to date.
Rite Aid
The reported number of Rite Aid Corp. (NYSE: RAD) shares sold short dwindled from more than 147.32 million to over 143.47 million as of the most recent settlement date, adding to the 10% decline in the previous period. The latest figure was 13.6% of the company’s total float. The average daily trading volume shrank again in the most recent period, so the days to cover rose from about 11 to 13. Note that the end-of-March reading of more than 163 million was the highest level of short interest so far this year.
Rite Aid posted a penny per share net loss for the most recently reported quarter put offered solid guidance. Still, its share price retreated more than 8% but then recovered most of that decline during the period. The stock closed on Wednesday at $1.63 a share, which was more than 23% lower compared with the beginning of the year. Rite Aid shares have traded between $1.38 and $4.23 apiece in the past 52 weeks.
24/7 Wall St.Ford
After a more than 10% retreat in the prior period, Ford Motor Co. (NYSE: F) saw the number of its shares short in the latter weeks of the month remain essentially flat at more than 129.17 million, which was 3.3% of the iconic automaker’s float. At the average daily volume on the latest settlement date, it would take about three days for sellers to cover all their short positions.
Ford’s first-quarter results were better than analysts had forecast and the report indicated further cost-cutting was in store. The share price ended the latest settlement period about where it began it, after being both up almost 4% and down more than 4% in the interval. The shares closed most recently at $11.06, which is down more than 12% since the beginning of the year. The shares have changed hands between $10.14 and $13.48 apiece in the past 52 weeks.
And the Rest
Rounding out the top 10 were Alibaba Group Holding Ltd. (NYSE: BABA), J.C. Penney Co. Inc. (NYSE: JCP), Bank of America Corp. (NYSE: BAC) and Sprint Corp. (NYSE: S). Short interest moves among these four were mixed and modest.
Note that CenturyLink Inc. (NYSE: CTL) failed to crack the top 10 as short sellers took a breather after the previous two consecutive sharp increases in short interest. Also lingering outside the spotlight of the top 10 most shorted NYSE stocks were offshore driller Ensco Corp. (NYSE: ESV) and oilfield contractor McDermott International Inc. (NYSE: MDR).
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