After trading lower in early summer, the broader markets have managed modest gains lately and are again trading near all-time highs. Even the Nasdaq, which took a hit last month, is on the rebound, as overall the second-quarter earnings reporting season has been stronger than some had feared because of concerns of rising interest rates and inflation, as well tensions with foreign trading partners.
Judging by the most shorted stocks traded on the New York Stock Exchange between the July 13 and July 31 settlement dates, those sellers were focused on one favorite, Bank of America, which saw the only sizable move in that time. Other moves among those at the top of the list were mixed and modest.
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.
Rite Aid
The reported number of Rite Aid Corp. (NYSE: RAD) shares sold short shrank from more than 180.95 million to 174.94 million or so between the most recent settlement dates, but this specialty retailer stayed atop the list. That was 16.6% of the company’s total float, after a retreat from the highest level of short interest so far this year. The average daily trading volume rose during the period, and the days to cover figure slipped from about 19 to 16.
During the period, Rite Aid was still looking to merge with Albertsons. Its share price rose about 21% by the latest settlement date, but all of that gain was lost afterward, in part due to the merger deal failing. In the past week though, the stock has seen a pop of more than 2%, and it closed most recently at $1.54 a share. That still was more than 27% lower since the beginning of the year. Rite Aid shares have traded between $1.38 and $2.80 apiece in the past 52 weeks.
Chesapeake Energy
The number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short increased about 2% in the most recent period, and this oil and gas company stayed in the number two spot on the list. The reported short interest of more than 150.75 million shares was 16.8% of the total float, and it was the seventh 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 four days to cover all the short positions.
Chesapeake sold assets to help pay down debt during the period, but its share price ended those two weeks more than 6% lower than where it began. The S&P 500 was essentially flat between the settlement dates. The stock has recovered somewhat in the past week, and it ended trading at $4.63 a share on Thursday. That still is about 58% higher since the beginning of May. Shares have changed hands as high as $5.60 and as low as $2.53 in the past year.
Alibaba
Alibaba Group Holding Ltd. (NYSE: BABA) climbed a couple of spots on the list as the number of its shares increased almost 6% from the previous period. The more than 146.49 million shares reported at the end of last month totaled 5.5% of the Chinese e-commerce giant’s float, and it was highest level of short interest so far this year. The daily average volume decreased a bit during the most recent period, but the days to cover stayed at nine.
Alibaba remains a favorite large-cap play despite recent volatility in the social media space. The share price ended the final two weeks of July more than 1% lower, though it had been up more than 4% earlier in the period. The stock closed Thursday at $177.19 a share. That is about 13% lower since the first of June. The 52-week low of $147.50 was seen almost a year ago, and the 52-week high of $211.70 back in June.
J.C. Penney
The number of J.C. Penney Co. Inc. (NYSE: JCP) shares short grew by less than 145,000 in the latest period to over 139.65 million. Short interest has increased in five of the past six periods and was a whopping 45.6% of the struggling retailer’s float most recently. The daily average trading volume jumped during the two-week period, so the days to cover declined from about 19 to 11.
Some still see shares of the struggling retailer having plenty of upside potential. Its share price ended the short interest period up less than 2%, though it had been over 10% higher at one point. The stock saw a more than 5% bump this week but gave up much of that gain and closed most recently at $2.43 a share. That is more than 30% lower than at the beginning of the year. The 52-week low, seen back in May, was $2.25, while the 52-week high of $5.04 was reached about a year ago.
Bank of America
Bank of America Corp.’s (NYSE: BAC) short interest in the latest two-week period surged around 24% to over 136.63 million shares, which was the greatest number of shares short since March. The latest figure represents 1.4% of the total float. As of the end of last month, it would take about two days to cover all short positions after the daily average volume rose sharply.
Lower taxes helped Bank of America beat earnings expectations in the period. Its share price ended the latest settlement period with a gain of more than 8%, and it has risen some more since then. The stock closed most recently at $31.60 a share, which is more than 7% higher than at the beginning of June. The shares have changed hands between $22.75 and this week’s $33.05 in the past year.
Sprint
After retreating in the previous two periods, Sprint Corp. (NYSE: S) short interest declined over 6% more in the latest period. That was over 8.4 million shares less by month’s end to more than 125.74 million, or 23.8% of the telecom’s total float. The days to cover climbed to 19 from 17 as the daily average volume slipped to a new year-to-date low.
Sprint continues to roll out super-fast 5G wireless service, recently announcing three more cities. The stock ended the latest short interest period about 4% lower, with most of that decline coming early in the period, but it has risen more than 19% since then. The shares closed most recently at $6.08 apiece, which is down more than 6% from the year-to-date high in April. They hit a 52-week high of $8.92 last August, which compares to the 52-week low of $4.81 seen back in March.
And the Rest
Rounding out the top 10 were Snap Inc. (NYSE: SNAP), General Electric Co. (NYSE: GE), Weatherford International PLC (NYSE: WFT) and Ford Motor Co. (NYSE: F). Weatherford saw the only decline in the number of shares short here, allowing it to slip out of the top six. Ford led the gainers, with an increase of a little more than 6% in those two weeks.
Just outside the spotlight of the top 10 most shorted NYSE stocks were telecoms AT&T Inc. (NYSE: T) and CenturyLink Inc. (NYSE: CTL), as well as offshore driller Ensco Corp. (NYSE: ESV).
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