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Investors in Canadian stocks should read the Toronto Stock Exchange short report, as it sometimes reveals interesting information as to the size of bets against stock prices. I have tried to make some improvements relative to the initial edition of this article.

The Canadian gold stocks were the most heavily shorted according to that report, and interestingly, some of them have rallied smartly now that tax loss season has finished. This time, I have sorted for TSX-listed stocks with at least 10 million shares short (66 names) and then consolidated their TSX short position with their short on any US exchange they are listed on, to get an aggregate short position.

I sorted by the percentage of shares outstanding that are short rather than the absolute number, because big companies would otherwise show up on the top shorted list purely due to size. You'll be quick to point out that my method may miss a relatively heavily shorted small cap stock with less than 10 million position. That's true, but I'd rather avoid the smaller cap stocks, because illiquidity can hurt you if you are trading these issues.

One final embellishment is adding the US stock symbol for easy access to charts and quotes on Seeking Alpha. However, I note the Canadian symbol and listing is quite often the more liquid one. And you have the currency effects by looking at the US price chart exclusively.

The top twenty relatively most shorted TSX-listed stocks as of December 31 were as follows:

(NASDAQ:BBRY)BLACKBERRY LIMITED13,068,074143,816,515156,884,589526,000,00029.8%
(NYSE:TC)THOMPSON CREEK METALS COMPANY INC.16,178,20028,858,94945,037,149171,452,00026.3%
(OTCPK:ATSAF)ATS AUTOMATION TOOLING SYSTEMS INC.20,398,75216,64320,415,39588,676,00023.0%
(OTCPK:DRGDF)DETOUR GOLD CORPORATION J23,987,6943,235,04327,222,737138,514,00019.7%
(NASDAQ:TGA)TRANSGLOBE ENERGY CORPORATION J14,188,370222,08414,410,45473,971,00019.5%
(OTCPK:CWEGF)CREW ENERGY INC.22,653,398212,83422,866,232121,635,00018.8%
(OTCPK:LEGPF)LEGACY OIL + GAS INC.29,210,82550,44329,261,268157,232,00018.6%
(NYSE:CLS)CELESTICA INC. SV28,638,415158,65028,797,065163,400,00017.6%
(OTC:NUVSF)NUVISTA ENERGY LTD.21,680,15657,41121,737,567134,903,00016.1%
(NYSE:TAHO)TAHOE RESOURCES INC. J19,169,9221,369,87220,539,794146,004,00014.1%
(OTC:ELEEF)ELEMENT FINANCIAL CORPORATION J23,993,2211,133,92025,127,141184,519,00013.6%
(OTCPK:LBLCF)LOBLAW COMPANIES LIMITED20,925,31614,183,66035,108,976282,292,00012.4%
(NYSE:GIB)CGI GROUP INC. CL 'A' SV24,629,5937,088,63631,718,229276,014,00011.5%
(OTCPK:DPMLF)DUNDEE PRECIOUS METALS INC.13,186,2102,075,91815,262,128138,976,00011.0%
(NYSE:GIL)GILDAN ACTIVEWEAR INC.12,268,197796,79613,064,993121,951,00010.7%
(LUNDF)LUNDIN MINING CORPORATION60,372,6441,289,26061,661,904584,443,00010.6%
(OTCPK:OSKFF)OSISKO MINING CORPORATION J43,675,1712,456,58646,131,757439,189,00010.5%
(NYSE:AG)FIRST MAJESTIC SILVER CORP. J10,487,7661,535,97312,023,739117,025,00010.3%
(NYSEMKT:NGD)NEW GOLD INC.46,377,2875,201,76251,579,049503,318,00010.2%
(OTCPK:ATHOF)ATHABASCA OIL CORPORATION J37,568,5531,091,39738,659,950400,823,0009.6%

I don't profess to automatically be an expert in the most shorted stocks, but I can make a few observations. And when I do know or own one of them (hopefully both), a big short position can make me dig deeper to find out whether the shorts know something I should also find out.

BlackBerry has rallied in spite of having the largest short position of any Canadian company on NASDAQ as of December 13. Quite often when a "short" becomes too popular, the stock can only rally, especially one with cash in the bank and little debt.

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People hated Thompson Creek Minerals too, and it has rallied. In this case, I knew the stock and luckily, dumped it at $7.50 a few years ago. They were having problems with their Mount Milligan copper and gold mine. I guess things haven't improved much since then.

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One short that sticks out is THE largest Canadian food retailer Loblaw Companies. The big short could reflect, however, Loblaw's impending take over of retail rival Shoppers Drug Mart (OTCPK:SHDMF), but it certainly has paid off for those betting against the stock sine it was announced.

(click to enlarge)

Since the top twenty shorts did not bring forth some real nuggets, I am reproducing the next twenty, because this list contains some telecom and wireless stocks I like, namely Rogers Communications and BCE Inc.

(OTCPK:CFPZF)CANFOR CORPORATION12,321,129309,77612,630,905140,283,0009.0%
(OTCPK:TRMLF)TOURMALINE OIL CORP.16,669,958352,54017,022,498189,397,0009.0%
(NASDAQ:CTRX)CATAMARAN CORPORATION12,987,6884,938,67017,926,358206,298,0008.7%
(OTCPK:BNKJF)BANKERS PETROLEUM LTD. J22,068,08492,06022,160,144255,552,0008.7%
(OTCPK:MEGEF)MEG ENERGY CORP.17,903,858782,29118,686,149222,502,0008.4%
(OTCPK:ARNGF)ARGONAUT GOLD INC. J11,219,782506,55811,726,340149,060,0007.9%
(NYSE:RCI)ROGERS COMMUNICATIONS INC. CL 'B' NV21,289,1248,441,55129,730,675403,307,0007.4%
(NYSE:BPO)BROOKFIELD OFFICE PROPERTIES INC.32,255,9894,198,79736,454,786505,221,0007.2%
(NYSE:TRI)THOMSON REUTERS CORPORATION41,633,98114,721,14956,355,130820,432,0006.9%
(NYSE:TAC)TRANSALTA CORPORATION14,671,1933,055,83917,727,032268,200,0006.6%
(OTCPK:PWCDF)POWER CORPORATION OF CANADA SV24,913,8031,638,95326,552,756411,374,0006.5%
(NYSEMKT:GTE)GRAN TIERRA ENERGY INC. J16,627,388755,60117,382,989272,193,0006.4%
(NYSE:ECA)ENCANA CORPORATION19,568,54726,663,09246,231,639740,200,0006.2%
(NYSE:VRX)VALEANT PHARMACEUTICALS INTERNATIONAL, INC.13,792,9404,467,44818,260,388333,890,0005.5%
(NYSE:PWE)PENN WEST PETROLEUM LTD.16,547,1148,028,46524,575,579488,100,0005.0%
(NYSE:POT)POTASH CORPORATION OF SASKATCHEWAN INC.10,560,18029,771,25840,331,438863,211,0004.7%
(OTCQX:BDRBF)BOMBARDIER INC. CL 'B' SV52,650,73510,909,55263,560,2871,443,496,0004.4%
(NYSE:SLF)SUN LIFE FINANCIAL INC.23,369,4072,912,41726,281,824607,200,0004.3%
(OTCQX:COSWF)CANADIAN OIL SANDS LIMITED17,376,7593,167,54220,544,301484,569,0004.2%
(NYSE:BCE)BCE INC.28,544,8033,980,00032,524,803775,893,0004.2%

I am amazed Rogers has attracted a 7.2% combined short position, and I hope the shorts are wrong on that one, or BCE and TELUS (NYSE:TU). They've been good contrarian plays for me since the Summer, when Verizon (NYSE:VZ) decided not to enter the Canadian wireless market. Analysts feel the upcoming spectrum auction for the majors will be less costly than expected, although the Harper-led federal government continues to want to force unwanted changes on them.

I should note investors seem to continue to be skeptical of the prospects for Canadian energy producer names such as Encana Corp, MEG Energy and Penn West Petroleum as well as small caps such as Crew Energy and NuVista Energy.

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One caveat to my analysis: derivatives such as convertible issues can play a big part in short positions and some investors will sell the stock and buy the derivative in a tax loss or hedge strategy. This could be the case with New Gold, which has multiple warrant issues outstanding.

Next report ETA January 20.

Disclosure: I am long BCE, RCI, TU. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: Top 20 TSX Short Positions Dec. 31