Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message|
( followers)  

Two very helpful indicators of stock sentiment are the put/call ratio and shares shorted. A decreasing put/call ratio and decreasing number of shares shorted are both considered bullish changes in sentiment.

We ran a screen to illustrate the use of these indicators, screening large-cap stocks for those seeing both of these bullish changes: a significant decrease in put/call ratio over the last ten trading days, and a significant decrease in shares shorted month-over-month.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.


We also created a price-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. To access a complete analysis of this list's recent performance, click here.

Do you agree with the bullish sentiment for these stocks? Use this list as a starting-off point for your own analysis.

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

1. Yandex N. V. (NASDAQ:YNDX): Internet Information Providers Industry. Market cap of $11.0B. Put/call ratio has decreased 44.62% over the last ten trading days (from 1.3 to 0.72). Shares shorted have decreased from 2.90M to 1.21M, a change representing 3.30% of the company's 51.25M share float. It's been a rough couple of days for the stock, losing 11.09% over the last week.

2. Kinder Morgan, Inc. (NYSE:KMI):
Oil & Gas Pipelines Industry. Market cap of $19.60B. Put/call ratio has decreased 7.14% over the last ten trading days (from 0.14 to 0.13). Shares shorted have decreased from 13.04M to 12.25M, a change representing 1.56% of the company's 50.56M share float. The stock is a short squeeze candidate, with a short float at 81.82% (equivalent to 7.76 days of average volume).

3. Gap Inc. (NYSE:GPS): Apparel Stores Industry. Market cap of $10.57B. Put/call ratio has decreased 5.59% over the last ten trading days (from 1.43 to 1.35). Shares shorted have decreased from 31.93M to 25.68M, a change representing 1.43% of the company's 436.87M share float. The stock has gained 8.23% over the last year.

4. VMware, Inc. (NYSE:VMW):
Technical & System Software Industry. Market cap of $40.69B. Put/call ratio has decreased 4.04% over the last ten trading days (from 0.99 to 0.95). Shares shorted have decreased from 4.15M to 3.13M, a change representing 1.27% of the company's 80.38M share float. The stock has gained 18.42% over the last year.

5. American International Group, Inc. (NYSE:AIG):
Property & Casualty Insurance Industry. Market cap of $53.47B. Put/call ratio has decreased 3.33% over the last ten trading days (from 0.6 to 0.58). Shares shorted have decreased from 30.18M to 27.98M, a change representing 0.96% of the company's 228.46M share float. The stock has lost 15.93% over the last year.

6. General Motors Company (NYSE:GM): Auto Manufacturers Industry. Market cap of $40.77B. Put/call ratio has decreased 3.85% over the last ten trading days (from 0.52 to 0.5). Shares shorted have decreased from 52.26M to 47.17M, a change representing 0.73% of the company's 699.79M share float. The stock has performed poorly over the last month, losing 11.96%.

7. Netflix, Inc. (NASDAQ:NFLX):
Music & Video Stores Industry. Market cap of $13.66B. Put/call ratio has decreased 14.47% over the last ten trading days (from 1.52 to 1.3). Shares shorted have decreased from 9.94M to 9.62M, a change representing 0.63% of the company's 51.10M share float. The stock has performed poorly over the last month, losing 10.23%.

8. Nucor Corporation (NYSE:NUE): Steel & Iron Industry. Market cap of $11.80B. Put/call ratio has decreased 7.78% over the last ten trading days (from 0.9 to 0.83). Shares shorted have decreased from 10.71M to 9.19M, a change representing 0.48% of the company's 315.37M share float. The stock has lost 4.06% over the last year.

9. The Dow Chemical Company (NYSE:DOW): Chemicals Industry. Market cap of $39.70B. Put/call ratio has decreased 10.91% over the last ten trading days (from 0.55 to 0.49). Shares shorted have decreased from 19.13M to 14.00M, a change representing 0.45% of the company's 1.15B share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.27). The stock has gained 39.09% over the last year.

10. Dollar General Corporation (NYSE:DG): Discount, Variety Stores Industry. Market cap of $10.60B. Put/call ratio has decreased 4.73% over the last ten trading days (from 1.69 to 1.61). Shares shorted have decreased from 8.24M to 7.83M, a change representing 0.41% of the company's 98.96M share float. The stock has gained 3.16% over the last year.

*Options data sourced from Schaeffer’s, 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.

Source: 10 Large Caps With Bullish Options Sentiment and Short Trends