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Astec Analytics, a division of SunGard Data Systems, provides investors with short selling market color using data from the securities lending market.
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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.OB, RBCN, AIXG, AVNR, CHBT.PK, IWM, MNKD, MHR, FII, STSI, CONN, BPI, DLR, LPHI, ANR, YONG, SHZ, CAGC.PK, NAVB, YRCW, CGA, VECO, SOMX, CLNE, BKS, APRI, BMO, DCTH, AN, ESLRQ.PK, ATPG, EDMC, TRX, UEC, RBA, ADY, NYMX, RKT, ZAGG, ROYL, BSDM, 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.

    NameTickerChange in cost-to-borrow (bps)
    AMERICAN INTL GROUP INC     AIG 396
    SEARS HLDGS CORP            SHLD63
    SANOFI AVENTIS              SNY 402
    NOKIA CORP                  NOK 1,056
    ST JOE CO                   JOE -1,815
    FIRST SOLAR INC             FSLR22
    CHINA MEDIAEXPRESS HLDGS INCCCME189
    RUBICON TECHNOLOGY INC      RBCN-667
    AIXTRON SE                  AIXG-94
    AVANIR PHARMACEUTICALS INC  AVNR941
    CHINA-BIOTICS INC           CHBT1,054
    BOLIDEN AB                  BLS.TSX353
    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  LPHI2,642
    ALPHA NATURAL RESOURCES INC ANR 0
    YONGYE INTL INC             YONG3,684
    CHINA SHEN ZHOU MNG & RES INSHZ 3,399
    CHINA AGRITECH INC          CAGC421
    NEOPROBE CORP               NEOP-2,006
    YRC WORLDWIDE INC           YRCW916
    CHINA GREEN AGRICULTURE INC CGA 2,371
    VEECO INSTRS INC DEL        VECO-1
    SOMAXON PHARMACEUTICALS INC SOMX1,375
    CLEAN ENERGY FUELS CORP     CLNE530
    BARNES & NOBLE INC          BKS 181
    APRICUS BIOSCIENCES INC     APRI4,677
    BANK MONTREAL QUE           BMO 96
    DELCATH SYS INC             DCTH597
    AUTONATION INC              AN  -12
    EVERGREEN SOLAR INC         ESLR1,117
    ATP OIL & GAS CORP          ATPG-21
    EDUCATION MGMT CORP NEW     EDMC9
    TANZANIAN ROYALTY EXPL CORP TRE -420
    SUNPOWER CORP               SPWR.A91
    URANIUM ENERGY CORP         UEC -23
    RITCHIE BROS AUCTIONEERS    RBA -35
    FEIHE INTL INC              ADY 836
    NYMOX PHARMACEUTICAL CORP   NYMX3,313
    ROCK-TENN CO                RKT 37
    ZAGG INCORPORATED           ZAGG277
    ROYALE ENERGY INC           ROYL1,164
    BSD MED CORP DEL            BSDM43

    Stocks: AIG, SHLD, SNY, NOK, JOE, FSLR, CCME.OB, RBCN, AIXG, AVNR, CHBT.PK, IWM, MNKD, MHR, FII, STSI, CONN, BPI, DLR, LPHI, ANR, YONG, SHZ, CAGC.PK, NAVB, YRCW, CGA, VECO, SOMX, CLNE, BKS, APRI, BMO, DCTH, AN, ESLRQ.PK, ATPG, EDMC, TRX, UEC, RBA, ADY, NYMX, RKT, ZAGG, ROYL, BSDM, STEC
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  •  
    Where are you finding these cost-to-borrow stats?
    9 May 2011, 01:50 PM Reply Like
  •  
    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
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