S&P 500 Stocks with the Highest Short Interest

Going into earnings season, it is always interesting to see which stocks have the highest short interest. The reason for that is if there are any "surprises" to the upside, these tend to be the stocks that take off like a rocket as shorts are forced to cover (buy).

Courtesy of Bespoke blog we have an interesting list below - including many names we discuss, cover, or have shorted from time to time!

(click to enlarge)



A couple notes on some of these names

• Mylan (MYL) is a generic drugmaker that we were once long; it really took off in April (considering its a low volatility name) but has been slowly drifting back down since
• Ciena (CIEN) is an old long of ours, in the optical networking field... I prefer some of the names we've owned in different parts of the networking path
• I had not looked at Intuitive Surgical (ISRG) in ages, and until a week ago its chart was actually quite strong, but it fell off a cliff
• Wynn Resorts (WYNN) we went negative on the whole casino group in 2007, but at the time we could not short individual names, so we missed out on profiting off the 80%+ drops in many of these names. Instead we tried to short in April and got our bell rung. I tried to short it again late last week, but it just missed my limit order, so instead we have a peer which has worked out nicely in a very short amount of time.
• Almost from day 1, as we anticipated a damaged US consumer, we've been against Harley Davidson (HOG); they report tomorrow. Same for Whole Foods Market (WFMI) - the company best suited for the house ATM era when middle class could shop way over their head. Same with Abercrombie & Fitch (ANF) - selling high prices clothes to teenagers and young adults who don't have the parent ATM anymore. Aeropostale (ARO) and Buckle (BKE) have stolen much of their customer base just as Walmart has stolen much of Targets.
• Similar idea to the above with Whirpool (WHR) which has the additional 'benefits' of debt and pensions to deal with.
• I am surprised to see Diamond Offshore (DO) here....
• AutoNation (AN) I'd like to buy at a lower level, been stalking it for 3-4 months only to see it to either rally or go sideways on corrections.
• Lots of homebuilders on the list.

Comments

[John Galt:]

DO is the furtherest out deep offshore oil rigs, I guess is that the logic is that if oil is where it is at ( or cheaper) then the shorter/intermediate rigs will be of more use than the deep offshore harder to obtain oil that becomes more profitable with higher oil prices... who knows.

I was going to go long ISRG when it was 90 bucks or so but I choose some other companies that also worked out. One of the things I do like about ISRG is that they have a tremendous cash position ( which is an added bonus in a deflationary enviornment) and a truly revolutionary product that keeps growing. I believe there is a premium to be paid when dealith with dangerous surgery... but with that being said Obamacare does raise uncertainty.

HOG and Whole Paycheck have been shorted for what seems like ever.

Jul 14 08:36 AM

[Henry Buttal:]

Interesting that, other than C, the financials are not really participants. Perhaps this quarter will be as strong as signaled by the GS earnings announcment.

Jul 14 09:20 AM

[TraderMark:]

FASB allows banks to hold toxic stuff on books and not admit it

the govt has said they will not allow any major bank to go

the govt allows banks to fund with FDIC backstop

the Fed has set rates to nearly zero, allows banks to borrow low and lend at any rate over zero

The banks have stacked a series of fees onto consumers

no one seems to care about balance sheets because the yield curve is so steep that any 4 year old can run a bank and make money now. As long as we dont care about the old loans its all gravy from here

So its a bit hard to short these.


On Jul 14 09:20 AM Henry Buttal wrote:

> Interesting that, other than C, the financials are not really participants.
> Perhaps this quarter will be as strong as signaled by the GS earnings
> announcment.

Jul 14 05:38 PM

[Ryu Mei Co:]

Why would anybody want to short C? Suppose C's share price is declining due to weak earning report, shorters only get $2 buck per share! Moreover, the Fed aren't going to let C go BK. I bet CIT is getting aid from the Fed, so why short any of the financial?

Jul 15 03:58 AM

[Wisdom vs. ...:]

IMO, DO is selling at a premium b/c of PBR contracts, and that premium is too high. IMO CIEN's bad news is priced in, cash flow has been terrible but optical switching is going to start flying sometime over the next year; fact: price is 1x TTM sales, doubt it will go much lower

Jul 15 01:35 PM