When considering stocks, it's always helpful to gauge what the rest of the market thinks. One source for that is the number of shares shorted. Companies seeing significant increases in shares shorted are being viewed more negatively, and vice-versa.
We ran a screen on the basic materials sector for stocks seeing the most significant decreases in shares shorted month-over-month. This indicates that short sellers are less bearish on these names than they were before.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
Do you think these stocks will outperform too? Use this list as a starting point for your own analysis.
List sorted by decrease in shares shorted as a percent of share float.
1. C&J Energy Services, Inc. (NYSE:CJES): Through its wholly owned subsidiary, C&J Spec-Rent Services, Inc., provides specialty equipment services for oil and natural gas exploration and production companies in the Texas, Louisiana, and Oklahoma, regions of the United States. Market cap at $1.14B, most recent closing price at $21.49. Shares shorted have decreased from 7.28M to 6.58M over the last month, a decrease which represents about 1.96% of the company's float of 35.76M shares. Days to cover ratio at 11.2 days.
2. CARBO Ceramics Inc. (NYSE:CRR): Manufactures and supplies ceramic proppants primarily used in the hydraulic fracturing of natural gas and oil wells in the United States and internationally. Market cap at $1.88B, most recent closing price at $81.50. Shares shorted have decreased from 5.36M to 4.99M over the last month, a decrease which represents about 1.88% of the company's float of 19.73M shares. Days to cover ratio at 17.53 days.
3. Carrizo Oil & Gas Inc. (NASDAQ:CRZO): Engages in the exploration, development, and production of oil and gas in the United States and United Kingdom. Market cap at $882.56M, most recent closing price at $22.02. Shares shorted have decreased from 6.83M to 6.14M over the last month, a decrease which represents about 1.88% of the company's float of 36.64M shares. Days to cover ratio at 6.9 days.
4. Legacy Reserves Lp (NASDAQ:LGCY): Engages in the acquisition and development of oil and natural gas properties primarily located in the Permian Basin, Mid-Continent, and Rocky Mountain regions of the United States. Market cap at $1.3B, most recent closing price at $22.95. Shares shorted have decreased from 838.31K to 308.94K over the last month, a decrease, which represents about 1.33% of the company's float of 39.68M shares. Days to cover ratio at 0.83 days.
*Short data sourced from Yahoo! Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Business relationship disclosure: Business relationship disclosure: Kapitall is a team of analysts. This article was written by Sabina Bhatia, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.