October is often a volatile time for the stock market, and this year investors have plenty to worry about, including rising interest rates, weakness in international markets, growing effects of the trade war with China and a mixed bag from corporate earnings, as well as the upcoming elections and the holiday season. All this has the big indexes retreating from all-time highs.
Judging by the most shorted stocks traded on the New York Stock Exchange between the September 28 and October 15 settlement dates, those sellers were cautiously positive. Among the favorite stocks, short interest rose for the most part, but mostly very modestly. The standout was Ford, with a double-digit percentage increase in the number of its shares short during those two weeks.
Note that the six most shorted NYSE stocks had more than 110 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 rose more than 3.2 million to 159.07 million or so between the most recent settlement dates, reclaiming a similar drop in the prior period. The most recent figure was 15.4% of the company’s total float, as well as more than 14 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 12 to 11.
Rite Aid shares kept sinking to new 52-week lows during the short interest period. The share price ended the latest settlement period about 17% lower, while the S&P 500 retreated less than 6% in that time. This past week, the stock fell more than 9% but recovered somewhat, and it closed most recently at $1.01 a share, near the 52-week low of $0.98. That was more than 15% lower than 90 days ago. Rite Aid shares have traded as high as $2.55 apiece in the past 52 weeks.
Snap
Sitting in the number two spot on the list for the second straight period was Snap Inc. (NYSE: SNAP), which saw the number of its shares short rise less than 1% in the first half of October. The more than 162.25 million shares reported most recently represented 25.3% of the social media and camera company’s total float. At the daily average trading volume in the middle of this month, it would take about five days for investors to cover all short positions.
A leaked memo suggested that Snap could be profitable before long. Yet, the stock ended the short interest period about 13% lower, and it has pulled back further since then. Snap’s share price was last seen at $6.59, which compares to the 52-week low of $6.46 seen earlier this month. The 52-week high, reached early this year, was $21.22 a share. The stock now is down almost 49% in the past 90 days.
J.C. Penney
The number of J.C. Penney Co. Inc. (NYSE: JCP) shares short increased by more than 4% in the latest period to around 13.75 million. Note that short interest has grown in seven of the past 11 periods, and it was a whopping 46.5% of the department store operator’s float most recently. The daily average trading volume grew during the two weeks, so the days to cover number pulled back from about 10 to eight.
The struggling retailer’s newly appointed chief executive officer got a $6 million signing bonus. It was a bit of a roller-coaster ride for investors during those two weeks, with the share price down more than 7% and up more than 15%, though it ended the period only down a little more than 1%. The stock has pulled back some more since then and closed most recently at $1.43 a share. That is more than 40% lower over the past three months. The 52-week low, seen this week, was $1.38, while the 52-week high of $4.75 was reached early this year.
Ford
Ford Motor Co. (NYSE: F) jumped up a couple of spots on the list as the number of its shares short in first weeks of the month grew more than 10% to 130.62 million or so, which was 3.3% of the iconic Detroit 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.
Lately, Ford has had trouble with sales in China, the world’s largest car market. The share price ended the most recent settlement period more than 6% lower, and it has sagged further since that time. The stock closed most recently at $8.19 per share, which is about 8% lower than three months ago. The 52-week low of $8.19 was seen last week, and the shares have changed hands as high as $13.48 apiece in the past 52 weeks.
General Electric
General Electric Co. (NYSE: GE) remained in the top six even though the number of its shares short changed little in the settlement period. That followed a jump of more than 23% in the latter half of September. The more than 124.16 million shares reported most recently represented 1.4% of the conglomerate’s total float, and it compares to the year-to-date high above 155 million seen back in March. The daily average trading volume increased sharply again in the latest period, and the days to cover remained less than one.
24/7 Wall St. recently presented an argument for the breakup of General Electric. Short sellers watched the shares rise almost 7% but then end the period down more than 5%. In those two weeks, the Dow pulled back less than 5%. GE’s share price was last seen at $12.17, which compares with a 52-week low of $11.21 last month. The 52-week high, from about a year ago, was $21.65 a share. The stock now is down about 6% in the past 90 days.
Bank of America
Bank of America Corp.’s (NYSE: BAC) short interest in the latest two-week period slipped by about 6% to almost 116.67 million, and the stock fell a couple of spots down the list. That reading represented just 1.2% of the total float. As of the middle of October, it would take about two days to cover all short positions, after the daily average volume rose for the third consecutive period.
Bank of America remains one of Warren Buffett’s big stakes, but is it undervalued? Its share price ended the latest settlement period with a decline of more than 6%, though it had been up more than 3% at one point. The stock closed most recently at $26.19 a share, which is down almost 15% from 90 days ago. The shares have changed hands between $25.81 and $33.05 in the past year.
And the Rest
Rounding out the top 10 were Chesapeake Energy Corp. (NYSE: CHK), Transocean Ltd. (NYSE: RIG), Alibaba Group Holding Ltd. (NYSE: BABA) and Weatherford International PLC (NYSE: WFT). The gainers here were Transocean and Alibaba, but the downswings in the number of Chesapeake and Weatherford shares short were a bit deeper.
Note that Infosys Ltd. (NYSE: INFY) slipped back out of the top 10 most shorted NYSE stocks with a double-digit percentage decline. Lingering along with it outside of the spotlight of the top 10 was Sprint Corp. (NYSE: S).
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