Shares shorted is a helpful indicator for the sentiment surrounding a company – when the number of shares shorted decreases, it indicates that the sentiment surrounding a company has turned more bullish.
We ran a screen on dividend champions, companies that have consistently raised their dividend for the past 25 years. We screened these companies for those that have seen bullish trends in shares shorted, with significant decreases 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 think short sellers are calling it right on these names? Use this list as a starting-off point for your own analysis.
List sorted by decrease in shares shorted as a percent of share float.
1. Walgreen Co. (WAG): Drug Stores Industry. Market cap of $31.74B. Dividend yield at 2.57%, payout ratio at 26.94%. Shares shorted have decreased from 27.51M to 17.34M month-over-month, a change representing 1.12% of the company's 904.49M share float.
2. The Valspar Corporation (VAL): Specialty Chemicals Industry. Market cap of $2.79B. Dividend yield at 2.42%, payout ratio at 30.34%. Shares shorted have decreased from 2.67M to 2.18M month-over-month, a change representing 0.57% of the company's 86.21M share float. The stock has performed poorly over the last month, losing 13.66%.
3. Target Corp. (TGT): Discount, Variety Stores Industry. Market cap of $34.90B. Dividend yield at 2.37%, payout ratio at 24.0%. Shares shorted have decreased from 12.82M to 10.33M month-over-month, a change representing 0.36% of the company's 688.35M share float. The stock has had a couple of great days, gaining 7.79% over the last week.
4. W.W. Grainger, Inc. (GWW): Industrial Equipment Wholesale Industry. Market cap of $9.15B. Dividend yield at 2.02%, payout ratio at 26.51%. Shares shorted have decreased from 3.74M to 3.37M month-over-month, a change representing 0.61% of the company's 60.79M share float. The stock is a short squeeze candidate, with a short float at 5.65% (equivalent to 5.69 days of average volume). The stock has performed poorly over the last month, losing 15.48%.
5. Hormel Foods Corp. (HRL): Meat Products Industry. Market cap of $7.49B. Dividend yield at 1.82%, payout ratio at 27.23%. Shares shorted have decreased from 9.79M to 8.71M month-over-month, a change representing 0.78% of the company's 137.76M share float. The stock is a short squeeze candidate, with a short float at 6.28% (equivalent to 7.04 days of average volume). The stock has gained 31.71% over the last year.
6. Stepan Company (SCL): Cleaning Products Industry. Market cap of $714.65M. Dividend yield at 1.48%, payout ratio at 15.49%. Shares shorted have decreased from 505.72K to 474.00K month-over-month, a change representing 0.39% of the company's 8.08M share float. The stock is a short squeeze candidate, with a short float at 6.2% (equivalent to 11.37 days of average volume). The stock has gained 27.64% over the last year.
7. Family Dollar Stores Inc. (FDO): Discount, Variety Stores Industry. Market cap of $5.91B. Dividend yield at 1.47%, payout ratio at 21.85%. Shares shorted have decreased from 3.91M to 3.13M month-over-month, a change representing 0.84% of the company's 92.59M share float. The stock has gained 15.38% over the last year.
8. Sigma-Aldrich Corporation (SIAL): Specialty Chemicals Industry. Market cap of $7.27B. Dividend yield at 1.21%, payout ratio at 19.76%. Shares shorted have decreased from 2.86M to 2.37M month-over-month, a change representing 0.40% of the company's 121.76M share float. The stock is currently stuck in a downtrend, trading 7.29% below its SMA20, 12.78% below its SMA50, and 9.46% below its SMA200. The stock has performed poorly over the last month, losing 18.15%.
*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.
