Reversal in Bearish Sentiment? 11 Financial Stocks With Short Covering

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 |  Includes: BBT, BSAC, BX, CBG, CIT, DLR, GNW, HCN, IVZ, MET, RF
by: Kapitall

Interested in the financial sector? Looking at the current sentiment surrounding the names can be a helpful guide to choosing your investments.

Below is a list of 11 stocks from the financial industry that have seen steep decreases in the number of shares shorted month-over-month.



We also created an equal weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. As you can see, the list below has lagged the overall market. To access a complete analysis of this list's recent performance, click here.



Short sellers seem to think the upside potential of these names outweigh the downside. Are you also bullish on these companies? Use this list as a starting-off point for your own research into the financial sector...

List sorted by decrease in shares shorted as a percent of share float.

1. Digital Realty Trust Inc. (NYSE:DLR)
: REIT. Market cap of $5.71B. Shares shorted have decreased from 18.88M to 17.91M month-over-month, which represents a 1.06% decrease of a 91.86M share float. The stock is a short squeeze candidate, with a short float at 19.84% (equivalent to 18.1 days of average volume). The stock has gained 6.76% over the last year.

2. Health Care REIT Inc. (NYSE:HCN): REIT. Market cap of $7.23B. Shares shorted have decreased from 9.27M to 8.07M month-over-month, which represents a 0.82% decrease of a 146.50M share float. The stock has gained 27.81% over the last year.

3. The Blackstone Group (NYSE:BX): Asset Management Industry. Market cap of $21.08B. Shares shorted have decreased from 10.16M to 7.70M month-over-month, which represents a 0.74% decrease of a 332.04M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.33). The stock has gained 40.23% over the last year.

4. BB & T Corp. (NYSE:BBT): Regional Bank. Market cap of $18.73B. Shares shorted have decreased from 22.16M to 19.07M month-over-month, which represents a 0.45% decrease of a 691.98M share float. The stock has lost 17.83% over the last year.

5. Invesco Ltd. (NYSE:IVZ): Asset Management Industry. Market cap of $11.58B. Shares shorted have decreased from 10.07M to 8.35M month-over-month, which represents a 0.41% decrease of a 420.27M share float. The stock has gained 13.65% over the last year.

6. CIT Group Inc. (NYSE:CIT): Mortgage Investment Industry. Market cap of $8.64B. Shares shorted have decreased from 3.55M to 2.79M month-over-month, which represents a 0.38% decrease of a 200.09M share float. The stock has gained 7.27% over the last year.

7. MetLife, Inc. (NYSE:MET): Life Insurance Industry. Market cap of $48.99B. Shares shorted have decreased from 29.18M to 26.23M month-over-month, which represents a 0.36% decrease of a 819.50M share float. The stock has gained 6.22% over the last year.

8. Banco Santander-Chile (NYSE:SAN):
Money Center Banks Industry. Market cap of $16.75B. Shares shorted have decreased from 1.84M to 1.69M month-over-month, which represents a 0.36% decrease of a 41.10M share float. The stock has gained 50.72% over the last year.

9. Regions Financial Corp. (NYSE:RF): Regional Bank. Market cap of $9.27B. Shares shorted have decreased from 31.91M to 28.42M month-over-month, which represents a 0.28% decrease of a 1.25B share float. The stock has lost 13.6% over the last year.

10. CB Richard Ellis Group, Inc. (NYSE:CBG):
Property Management Industry. Market cap of $8.58B. Shares shorted have decreased from 9.02M to 8.33M month-over-month, which represents a 0.27% decrease of a 257.83M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.48). After a solid performance over the last year, CBG has pulled back during recent sessions. The stock is 6.29% below its SMA20 and 2.59% below its SMA50, but remains 23.25% above its SMA200. The stock has gained 54.11% over the last year.

11. Genworth Financial Inc. (NYSE:GNW): Life Insurance Industry. Market cap of $5.97B. Shares shorted have decreased from 14.28M to 13.05M month-over-month, which represents a 0.25% decrease of a 488.43M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 3.11). The stock has performed poorly over the last month, losing 10.04%.

*Short data sourced from Yahoo! Finance (Note: Current month for shares shorted is month ended 4/15/11), 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.