October turned out to be a very volatile month, with the stock markets seeing a correction and some sectors and many individual stocks slipping into bearish territory. Investors had 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 midterm elections and the upcoming holiday season.
Judging by the most shorted stocks traded on the New York Stock Exchange between the October 15 and October 31 settlement dates, those sellers had become more selective, as short interest moves in a few favorites were quite robust. Oil and gas companies Chesapeake Energy and Weatherford jumped back into the top six, while the one-time king of the hill, Rite Aid, led the decliners during those two weeks.
Note that the six most shorted NYSE stocks had more than 116 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.
Snap
Rising to the top spot on the list in the latest period was Snap Inc. (NYSE: SNAP), which saw the number of its shares short rise a little more than 1% in the latter half of October. The more than 143.73 million shares reported most recently represented 25.2% of the social media and camera company’s total float. At the daily average trading volume at the end of last month, it would take about five days for investors to cover all short positions.
The company posted a disappointing quarterly report last month. Shares dropped about 15% afterward but reclaimed about half of that decline by the settlement date. They climbed more afterward, and the share price was last seen at $6.79. That compares to the 52-week low of $5.77 seen during the short interest period. The 52-week high, reached early this year, was $21.22 a share. The stock now is down almost 45% in the past 90 days.
Rite Aid
The reported number of Rite Aid Corp. (NYSE: RAD) shares sold short tumbled more than 21 million to 140.89 million or so between the most recent settlement dates, declining for the second period in a row. The most recent figure was 13.4% of the company’s total float, as well as more than 45 million less than the highest level of short interest so far this year. The average daily trading volume declined during the period, and the days to cover figure rose from about 11 to 13.
Rite Aid shares sank to a new 52-week low during the short interest period. Yet the share price ended the latest settlement period almost 14% higher, most of that gain at the end of the period. This past week, the stock popped about 5%, while the S&P 500 rose less than 2%. The stock closed most recently at $1.29 a share, compared with the 52-week low of $0.98. Rite Aid shares have traded as high as $2.55 apiece in the past 52 weeks, but they are currently almost 13% lower than 90 days ago.
J.C. Penney
The number of J.C. Penney Co. Inc. (NYSE: JCP) shares short barely increased in the latest period to over 140.39 million. Note that short interest has grown in eight of the past 12 periods, and it was a whopping 46.7% of the department store operator’s float most recently. The daily average trading volume shrank during the two weeks, so the days to cover number grew from about eight to nine.
Shares of this struggling retailer fell to another 52-week low during the two-week period. Short sellers watched the share price retreat more than 21% but end the period only down less than 14%. The stock has pulled back another 14% or so this past week and closed most recently at $1.34 a share. That is more than 44% lower over the past three months. The 52-week low, seen in late October, was $1.31, while the 52-week high of $4.75 was reached early this year.
24/7 Wall St.General Electric
General Electric Co. (NYSE: GE) remained in the top six even as the number of its shares short dropped a little in the settlement period. The last big move was a jump of more than 23% in the latter half of September. The more than 122.86 million shares reported most recently still represented 1.4% of the conglomerate’s total float, and it compares to the year-to-date high above 155 million shares seen back in March. Though the daily average trading volume increased in the latest period, the days to cover remained at less than one.
Analysts kept ratcheting down expectations for GE during the period. The shares retreated around 14% during the period, despite being up almost 4% at one point. In those two weeks, the Dow pulled back only fractionally. GE’s share price was last seen at $8.58, after hitting a 52-week low of $8.15 earlier in the day. The 52-week high, from about a year ago, was $20.75 a share. The stock has lost about a third of its value in the past 90 days.
Weatherford International
Weatherford International PLC (NYSE: WFT) again finds itself in the top six on the list after the number of its shares sold short jumped 17% or so in the final two weeks of October. The stock was at number 10 on the list in the prior period. The more than 121.72 million shares reported most recently represented 12.3% of the total float. The days to cover reading ended the two weeks at around four, given the month’s end average daily volume.
During the short interest period, Weatherford saw an analyst downgrade with a big target price cut. Short sellers watched the share price fall about 56% but recover a little by the end of the month. The stock has pulled back a bit again this month and closed most recently at $1.13 a share. The 52-week low of $1.09 was seen this past week. The 52-week high, from last January, was $4.41. Now the stock is down 61% or so from three months ago.
Chesapeake Energy
The number of Chesapeake Energy Corp.’s (NYSE: CHK) shares short increased more than 9% in the most recent period, and this oil and gas company ticked up one spot on the list. The reported short interest of over 118.97 million shares was 13.3% of the total float. The year-to-date peak back in March was over 210 million shares short. At the posted daily average trading volume on the latest settlement date, it would take about three days to cover all the short positions.
In a time when Chesapeake has sold assets to pay down debt, it announced an acquisition during the short interest period. Short sellers watched its share price rise more than 7% but then end those two weeks down around 22%. The stock is trading about 4% lower than a week ago, and it ended Friday at $3.63 a share. That still is almost 12% higher in the past 90 days. Shares have changed hands as high as $5.60 and as low as $2.53 in the past year.
And the Rest
Rounding out the top 10 were Ford Motor Co. (NYSE: F), Bank of America Corp. (NYSE: BAC), Alibaba Group Holding Ltd. (NYSE: BABA) and Transocean Ltd. (NYSE: RIG). The number of shares short shrank for all four of them, led a double-digit percentage decline at Ford.
Lingering just outside of the spotlight of the top 10 again was Sprint Corp. (NYSE: S). Note that Infosys Ltd. (NYSE: INFY) continued to retreat from the top 10 most shorted NYSE stocks with another double-digit percentage decline. And Merck & Co. Inc. (NYSE: MRK) saw a huge surge in its shares sold short, but it remains well out of the top 10 for now.
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