shortside's  Instablog

shortside
Send Message
Astec Analytics, a division of SunGard Data Systems, provides investors with short selling market color using data from the securities lending market.
My company:
SunGard Data Systems
  • Stocks that are generating the most revenue for institutional lenders - may be a better list than most expensive stocks to short 2 comments
    May 9, 2011 1:23 PM | about stocks: AIG, SHLD, SNY, NOK, JOE, FSLR, CCME, RBCN, AIXG, AVNR, CHBT, IWM, MNKDC, FII, RCPI, CONN, BPI, DLR, LPHIZQ, YONG, SHZ, CAGC, NAVB, YRCW, CGA, VECO, SOMX, CLNE, BKS, APRI, BMO, DCTH, AN, ESLRQ, ATPAQ, EDMC, TRX, UEC, RBA, ADY, NYMX, WRK, ZAGG, ROYL, PRSN, STEC

    After posting lists of the most expensive stocks to borrow and short, I thought that it would be valuable to post a list sorted by the revenue that each stock is generating in the securities lending market.  To calculate revenue, I've simply multiplied the market value on loan for each stock by the average fee that brokers (and hence hedge funds) must pay to borrow (and short). 

    Many blue-chip stocks have very high loan balances because institutions use them as collateral to borrow cash.  This is why the securities lending market is also known as the equity finance market.  

    Many other small-cap stocks have very high average fees, yet because there's not much supply out there, there's no opportunity for most investors to short.

    I hope that this list shows the most popular short plays, in that the average fees are relatively high, and the balances that brokers are borrowing are high as well.

    The top stock on this new list is AIG.  With almost $1 billion worth of AIG stock on loan in the securities lending market, and an average fee in the double-digit percentage points, the daily revenue from lending AIG is substantial.  Is there necessarily a reason to short AIG just because it's on this list?  No.  But I hope that people can use this list to get some new ideas.

    Name Ticker Change in cost-to-borrow (bps)
    AMERICAN INTL GROUP INC      AIG  396
    SEARS HLDGS CORP             SHLD 63
    SANOFI AVENTIS               SNY  402
    NOKIA CORP                   NOK  1,056
    ST JOE CO                    JOE  -1,815
    FIRST SOLAR INC              FSLR 22
    CHINA MEDIAEXPRESS HLDGS INC CCME 189
    RUBICON TECHNOLOGY INC       RBCN -667
    AIXTRON SE                   AIXG -94
    AVANIR PHARMACEUTICALS INC   AVNR 941
    CHINA-BIOTICS INC            CHBT 1,054
    BOLIDEN AB                   BLS.TSX 353
    ISHARES TR                   IWM  3
    MANNKIND CORP                MNKD -41
    MAGNUM HUNTER RES CORP DEL   MHR  615
    FEDERATED INVS INC PA        FII  86
    STAR SCIENTIFIC INC          CIGX -109
    CONNS INC                    CONN -924
    BRIDGEPOINT ED INC           BPI  492
    DIGITAL RLTY TR INC          DLR  -120
    LIFE PARTNERS HOLDINGS INC   LPHI 2,642
    ALPHA NATURAL RESOURCES INC  ANR  0
    YONGYE INTL INC              YONG 3,684
    CHINA SHEN ZHOU MNG & RES IN SHZ  3,399
    CHINA AGRITECH INC           CAGC 421
    NEOPROBE CORP                NEOP -2,006
    YRC WORLDWIDE INC            YRCW 916
    CHINA GREEN AGRICULTURE INC  CGA  2,371
    VEECO INSTRS INC DEL         VECO -1
    SOMAXON PHARMACEUTICALS INC  SOMX 1,375
    CLEAN ENERGY FUELS CORP      CLNE 530
    BARNES & NOBLE INC           BKS  181
    APRICUS BIOSCIENCES INC      APRI 4,677
    BANK MONTREAL QUE            BMO  96
    DELCATH SYS INC              DCTH 597
    AUTONATION INC               AN   -12
    EVERGREEN SOLAR INC          ESLR 1,117
    ATP OIL & GAS CORP           ATPG -21
    EDUCATION MGMT CORP NEW      EDMC 9
    TANZANIAN ROYALTY EXPL CORP  TRE  -420
    SUNPOWER CORP                SPWR.A 91
    URANIUM ENERGY CORP          UEC  -23
    RITCHIE BROS AUCTIONEERS     RBA  -35
    FEIHE INTL INC               ADY  836
    NYMOX PHARMACEUTICAL CORP    NYMX 3,313
    ROCK-TENN CO                 RKT  37
    ZAGG INCORPORATED            ZAGG 277
    ROYALE ENERGY INC            ROYL 1,164
    BSD MED CORP DEL             BSDM 43
Back To shortside's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (2)
Track new comments
  • Tribs
    , contributor
    Comments (14) | Send Message
     
    Where are you finding these cost-to-borrow stats?
    9 May 2011, 01:50 PM Reply Like
  • shortside
    , contributor
    Comments (9) | Send Message
     
    Author’s reply » I work for a division of SunGard and we collect cost-to-borrow information from dozens of lending banks and borrowing broker dealers on a daily basis. We're not involved in the trading; we're just an information aggregator. We then publish aggregate stats on ShortSide.com for investors who want to monitor what's happening in the securities lending market on a daily basis.

     

    I hope this helps answer your question.
    9 May 2011, 02:28 PM Reply Like
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.