When the first-quarter earnings reporting season kicked off back in April, it looked at first like the overall solid results might provide a boost for the faltering markets, but as the month wore on, the big U.S. indices dithered somewhat. Ultimately, though, it seems the results were enough to help offset such concerns rising interest rates and potential trade wars. The broad markets are up at least 3% so far in May.
Judging by the most shorted stocks traded on the New York Stock Exchange between the April 30 and May 15 settlement dates, those sellers were becoming more discriminating — in fact they focused on one favorite: Sprint. Other moves among these stocks were mixed and mild, although Chesapeake Energy managed to reclaim the top spot on the list in the first two weeks of May.
Note that the six most shorted NYSE stocks still 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 110 million shares.
Chesapeake Energy
The number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short grew about 2% in the most recent period, allowing this oil and gas company to again top the list. The reported short interest of more than 195.91 million shares was 21.8% of the total float, and it was the third 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 six 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 about 26% higher than where it began, while the S&P 500 was up less than 3% between the settlement dates. The stock has almost doubled that gain since then, and it ended trading at $4.55 a share on Thursday. That is more than 54% higher year to date. Shares have changed hands as high as $5.68 and as low as $2.53 in the past year.
AT&T
AT&T Inc. (NYSE: T) slipped to the number two spot despite a fractional gain in the number of its shares short a year-to-date high as of the most recent settlement date. The latest reading of more than 193.91 million represented 3.2% of the company’s total float. As of the middle of this month, it would take around six days to cover all short positions, after the average daily trading volume increased somewhat in the period.
Some analysts now see AT&T as a contrarian play with upside potential. The share price declined about 2% in the first two weeks of May, though it was down almost 5% at one point in the period, and it has all but recovered in the past week. Shares ended trading on Thursday at $32.78 a share, which is down more than 15% year to date. AT&T has changed hands between $31.17 and $39.80 a share in the past 52 weeks.
Sprint
This month, Sprint Corp. (NYSE: S) saw its short interest surge more than 32%, lifting it back into the top six most shorted NYSE stocks. That was a gain of about 36.95 million during those two weeks to 151.21 million, which was 26.3% of the telecom’s total float, and the greatest number of shares short so far this year. The days to cover rose from about five to six in the period as the daily average volume pulled back.
A possible Sprint merger with T-Mobile was still on the table early this month. The stock ended the latest short interest period down more than 8%, most of that decline early in the period, but it has crept up about 1% since then. The shares closed most recently at $5.16 apiece, which is down about 13% year to date. They hit a 52-week high of $9.65 last June, which compares to the 52-week low of $4.81 seen last month.
24/7 Wall St.Rite Aid
The reported number of Rite Aid Corp. (NYSE: RAD) shares sold short grew from more than 143.47 million to nearly 147.44 million as of the most recent settlement date, recovering a similar decline in the previous period. The latest figure was 14.0% of the company’s total float. The average daily trading has decreased in five straight periods, and most recently the days to cover figure jumped from about 13 to 23.
During the period, options traders seemed to be expecting a big move in Rite Aid shares. Its share price was in the red for most of those two weeks but managed to end the period more than 1% higher. In the past week, the stock is up fractionally, and it closed on Thursday at $1.66 a share. That was more than 21% lower compared with the beginning of the year. Rite Aid shares have traded between $1.38 and $4.21 apiece in the past 52 weeks.
Weatherford
Weatherford International PLC (NYSE: WFT) falls to the fifth spot on the list even though the number of its shares sold short slipped just 1% in the first two weeks of May. Short interest has decreased for four periods in a row, and the more than 145.42 million shares reported most recently represented 14.8% of the total float. The days to cover reading ended the two weeks still at around six despite a rise in the average daily volume.
Some on Wall Street still see big upside potential in Weatherford stock. Short sellers watched the share price rise more than 18% by the end the settlement period, and an additional 3% or so afterward. The stock closed most recently at $3.51 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 $5.41. The stock is only up less than 2% year to date.
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 138.84 million shares reported most recently was down more than 5% for the period and represented 1.6% of the conglomerate’s total float. The daily average trading volume shrank somewhat, and the days to cover reading ticked up to about three.
So far this year, GE has been among the worst-performing of the Dow Jones industrials. Yet, the stock ended the short interest period more than 5% higher, though it has retreated about 3% since then. In those two weeks, the Dow rose less than 3%. GE’s share price was last seen at $14.60, 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 19% lower year to date.
24/7 Wall St.And the Rest
Rounding out the top 10 were J.C. Penney Co. Inc. (NYSE: JCP), Alibaba Group Holding Ltd. (NYSE: BABA), Ford Motor Co. (NYSE: F) and Bank of America Corp. (NYSE: BAC). Alibaba saw little change in is short interest, while the number of Ford and Bank of America shares dwindled somewhat.
Note that the number of Snap Inc. (NYSE: SNAP) shares sold short surged by a double-digit percentage between the settlement dates, but it fell short of making it into the top 10 list. Lingering along with it outside of the spotlight of the top 10 most shorted NYSE stocks were offshore driller Ensco Corp. (NYSE: ESV) and telecom CenturyLink Inc. (NYSE: CTL).
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