S&P 1500's Most Heavily Shorted Stocks

by: Bespoke Investment Group

The table below lists the 25 most heavily shorted stocks in the S&P 1500 as of the end of February. As shown, all of these stocks have at least 29% of their float sold short, and three (BTH, CSTR, and SPPI) have more than half of their float shorted. Looking at the breakdown of stocks based on market cap shows that the vast majority (18) on the list are small caps (that is typically the case). Of the 25 names highlighted, only four are large caps and just three are mid-caps.

There are certainly some lousy stocks on the list below. For example, four of the names (SPPI, DGIT, ESI, and LQDT) are down more than 25% year to date, and overall the average return of these 25 names is a gain of less than 3% on the year. Therefore, it would seem as if short-sellers are having a relatively good year given that the S&P 500 is up around 9.4% on the year. However, not all the names on the list were heavily shorted at the start of the year. We went back and looked at the most heavily shorted stocks as of Dec. 31 and found that their average return so far this year is a gain of 9.1%. In other words, from the short side, 2013 is shaping up to be another painful year.