Short interest figures for the middle of September were released after the close on Tuesday, so we have just updated our regular report on short interest trends for the market, sectors, and individual stocks for clients. Below we wanted to quickly highlight the stocks with the highest levels of short interest as a percentage of float. The list below shows the 29 stocks in the S&P 1500 that have more than a third of their free-floating shares sold short. Through yesterday’s close, the 29 stocks listed below have been crushing the market with an average gain of 8.14% (median: 6.03%), compared to the 1.24% gain for the S&P 1500. So, unlike August, where the most heavily shorted stocks were creamed, they’ve seen quite a bounceback in September.
Of the 29 names listed, just six stocks are down so far this month, and none of them are down by 10%. To the upside, six stocks are up by over 10%, and four of those have rallied more than 25%! In terms of sector representation, Consumer Discretionary has dominated the list with nearly half (14) of the 29 stocks shown. Behind Consumer Discretionary, the sector with the second most number of stocks listed is Energy with just four, so it’s pretty clear that Consumer Discretionary stocks are very much out of favor.
In terms of individual stocks, the most heavily shorted stock in the S&P 1500 is Applied Optoelectronics (NASDAQ:AAOI), which has nearly three-quarters of its float sold short, and behind AAOI another nine stocks have more than half of their float sold short. These names include Dillard’s (NYSE:DDS), RH (where the CEO just purchased 14K shares on Tuesday), and Shake Shack (NYSE:SHAK).