The arrival of September means that summer vacation time is over and it’s time to turn attention to the race to the end of the year. This year that includes not only the holiday shopping season but the midterm elections in the United States. Meanwhile, the trade war with China ramps up and interest rates and inflation rise, yet the stock market keeps trading near all-time highs (in a record bull run).
Judging by the most shorted stocks traded on the New York Stock Exchange between the August 31 and September 14 settlement dates, those sellers were focused on a couple of stocks, including Infosys, which jumped into the top six on a surge in its shares short.
Note that the six most shorted NYSE stocks had more than 125 million shares short at the end of the most recent settlement period. In fact, all of 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 dropped by near 530,000 to 162.18 million or so between the most recent settlement dates, yet this specialty retailer stayed atop the list. That was 15.4% of the company’s total float, as well as more than 20 million less than 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 15 to 13.
Goldman Sachs recently initiated coverage of Rite Aid with a Sell rating and a price target of just $1. The share price ended the latest settlement date more than 6% lower, though it had been down as much as 11% in the interval. In the past week, the stock dropped 7% but recovered, and it closed most recently at $1.23 a share, a 52-week low. That was more than 41% lower than 90 days ago. Rite Aid shares have traded as high as $2.55 apiece in the past 52 weeks.
Infosys
India-based Infosys Ltd. (NYSE: INFY) jumped into the top six in the initial weeks of the month That’s because the number of its shares short surged more than 97% in the period to 13.95 million or so. Note that at the average daily volume on the latest settlement date, it would take about 14 days for those sellers to cover all their short positions.
This consulting, IT and outsourcing company announced a joint venture that expands its footprint into Singapore earlier this month. The share price ended the latest settlement period less than 2% lower, and it retreated more afterward. The shares closed most recently at $10.15. However, that still is up about 9% in the past three months. The shares have changed hands as low as $7.07 and as high as $10.65 apiece in the past 52 weeks.
J.C. Penney
The number of J.C. Penney Co. Inc. (NYSE: JCP) shares short decreased by around 4% in the latest period to almost 129.96 million. Note that short interest has increased in six of the past nine periods, and it was a whopping 42.3% of the struggling retailer’s float most recently. The daily average trading volume decreased sharply during the two-week period, so the days to cover rose from about six to 13.
Some have wondered whether J.C. Penney or Sears will become a penny stock first. The former’s share price rose more than 9% during those two weeks, while the S&P 500 was barely any higher on the most recent settlement date. The stock has been relatively flat since the settlement date and closed most recently at $1.90 a share. Yet, that is more than 27% lower over the past three months. The 52-week low, seen last month, was $1.60, while the 52-week high of $4.75 was reached early this year.
Chesapeake Energy
The number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short decreased more than 5% in the most recent period, and this oil and gas company slipped to number four on the list. The reported short interest of more than 127.34 million shares was 14.2% of the total float, and it was the 10th 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 five days to cover all the short positions.
Chesapeake’s solid second-quarter results came with lowered guidance for the fiscal year. Short sellers watched its share price retreat more than 10% during those two weeks, yet it has more than recovered since then. The stock is trading more than 10% higher than a week ago, and it ended Tuesday at $4.62 a share. That still is more than 4% lower in the past 90 days. Shares have changed hands as high as $5.60 and as low as $2.53 in the past year.
Bank of America
Bank of America Corp.’s (NYSE: BAC) short interest in the latest two-week period rose by more than 870,000 to 126.38 million or so shares, but it slipped one spot down the list. The latest reading still represented just 1.3% of the total float. As of the middle of this month, it would take about three days to cover all short positions, after the daily average volume rose from a year-to-date low.
Bank of America remains one of Warren Buffett’s big five stakes. Its share price ended the latest settlement period with a decline of less than 2%, most of the retreat coming at the end of the period. The stock closed most recently at $30.67 a share, which is down about 2% from 90 days ago. The shares have changed hands between $24.69 and $33.05 in the past year.
Snap
In the top six on the most shorted list for a second straight period, Snap Inc. (NYSE: SNAP) saw the number of its shares short pop more than 6% in the first half of September. The more than 126.07 million shares reported most recently represented 24.7% of the social media and camera company’s total float. At the daily average trading volume at the middle of this month, it would take about four days for investors to cover all short positions.
Snap announced the departure of its chief strategy officer during those two weeks. The stock ended the short interest period almost 16% lower, and it has pulled back a little more since then. Snap’s share price was last seen at $9.05, up from last week’s new 52-week low of $8.67. The 52-week high, hit early this year, was $21.22 a share. The stock now is down more than 6% in the past 90 days.
And the Rest
Rounding out the top 10 were Weatherford International PLC (NYSE: WFT), Ford Motor Co. (NYSE: F), Alibaba Group Holding Ltd. (NYSE: BABA) and Sprint Corp. (NYSE: S). The first two here each saw a notable bump in the number of its shares short, while the latter two had marginal declines in their short interest between the most recent settlement dates.
Lingering outside the spotlight of the top 10 most shorted NYSE stocks were General Electric Co. (NYSE: GE), Transocean Ltd. (NYSE: RIG) (which also saw a surge in short interest) and AK Steel Holding Corp. (NYSE: AKS).
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