BEAR BAIT – The 10 Most Shorted Stocks

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Short interest data for July was just released, giving investors a window into which stocks are the most hated on Wall Street.

In a nutshell, short interest shows the percentage of a company’s outstanding shares that are held by bearish investors. For those unfamiliar, “going short” is the practice of selling an asset you don’t own, then purchasing the asset later to “cover” your position. You then make money if the asset falls in value because you sell first at a higher price, then buy it back at a lower one.

To see short interest so high in these stocks is a double-edged sword. If a boatload of investors are betting against a company and selling it short, that kind of sentiment is noteworthy … however, if one of these dogs manages to surprise Wall Street with a glimmer of hope, all the short sellers will rush to buy back their shares before prices rise — creating the dreaded “short squeeze” that pushes prices higher in a hurry.

However you’re playing these stocks, either long or short, it’s still very important to keep an eye on short interest data as a measure of sentiment and possible volatility to come.

Short Interest Leaders Through Mid-July

So which stocks are the most shorted on Wall Street right now? Well, according to short interest data that is current through mid-July and just released to investors, here they are:

  1. World Acceptance (WRLD). Short interest of 59% as of July 15; shares are down 6% year-to-date in 2014.
  2. ITT Educational Services (ESI). Short interest of 48%, shares are down 56% YTD.
  3. Ebix (EBIX). Short interest of 47%, shares are down 15% YTD.
  4. NeuStar (NSR). Short interest of 37%, shares are down 42% YTD.
  5. Outerwall (OUTR). Short interest of 37%, shares are down 20% YTD.
  6. GT Advanced Technologies (GTAT). Short interest of 36%, shares are up 63% YTD.
  7. iRobot (IRBT). Short interest of short interest of 35%, shares are down 1% YTD.
  8. Swift Energy (SFY). Short interest of 35%, shares are down 14% YTD.
  9. Aeropostale (ARO). Short interest of 34%, shares are down 65% YTD.
  10. Cliffs Natural Resources (CLF). Short interest of 34%, shares are down 37% YTD.

Data from Bespoke Investment Group.

Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP


Article printed from InvestorPlace Media, https://investorplace.com/2014/07/short-interest-most-shorted-stocks/.

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