Wall Street has been extra volatile recently, with concerns about China’s growth and constant anxiety over the Federal Reserve’s next move pushing stocks lower.
It’s completely normal for broad market indices to sell off every few years on this concern or that, but rarely do you find a bearish consensus on the market as a whole (OK, with the exception of years like 2008, perhaps).
And yet a bearish consensus is precisely what we find with these 10 names, which are some of the most hated in the entire stock market today. Each of them has tens — sometimes hundreds — of millions of shares sold short, which means traders are actually selling their stock and waiting to buy it back later, betting the price will fall in the meantime. This results in high short interest ratios, which essentially represents how many days it would take to buy back all that shorted stock.
The latest short interest data (from July 31 to Aug. 14) has just been released, so we’ll look at these bear bets in all their glory. Here are 10 stocks boasting some of the highest short interest ratios on Wall Street today.
Most Hated Stocks on Wall Street: Sirius XM (SIRI)
Short Interest Ratio: 5.6
Market Capitalization: $22.6 billion
Satellite radio isn’t the only arena where Sirius XM (SIRI) stands out. It has also carved its own niche in the stock market, where it’s one of the most polarizing names on Wall Street.
Well, specifically, SIRI stock has one of the highest short interest ratios on Wall Street.
Currently, there are more than 160 million shares of Sirius XM being sold short, compared to an average daily volume of just 28.4 million. A “short squeeze,” in which bears are forced to buy back all the stock they sold short, would take more than five full days, assuming average volume.
With more options than ever for how we listen to radio, and Sirius increasingly focusing on the automotive industry for growth, investors are concerned that millennials aren’t snapping up cars like previous generations, leaving SIRI shareholders in a tough spot.
Most Hated Stocks on Wall Street: Frontier Communications (FTR)
Short Interest Ratio: 6.2
Market Capitalization: $5.8 billion
Sure, I suppose you could come up with a few reasons to be bullish on Frontier Communications (FTR). But could you come up with 156 million? Because that’s how many shares of the telecom company are sold short.
Why would anyone be bearish on a large company like FTR, a multibillion-dollar powerhouse in a consolidating industry?
Well, its $9.4 billion in debt is probably a good place to start. Debt isn’t all bad, of course, but Frontier Communications should probably take it easy. Its dividend is heavily debt-financed at this point, and the company pays 42 cents annually to shareholders, with only a nickel a share expected to go to the bottom line.
Don’t be lured by this 8.3% dividend yield, because it might not be around for long.
Most Hated Stocks on Wall Street: Transocean (RIG)
Short Interest Ratio: 6.7
Market Capitalization: $5 billion
Speaking of jeopardized dividends, that’s sort of Transocean’s (RIG) thing right now. As an offshore contract driller, Transocean operates a fleet of rigs that explore the seas for black gold — when the demand is there, of course.
It’s not as if there’s no demand for oil anymore, it’s just that day rates are directly correlated with the price of oil, and Transocean can’t command tidy sums for its drilling platforms with oil prices near 2009-level lows.
RIG stock is down more than 60% in the last year, thanks in no small part to short sellers, who currently speak for 123 million shares — or about a third of the 363 million-share float. Until oil prices stage a legitimate rally with some legs to it, expect Transocean to be one of the most loathed stocks on the Street.
Most Hated Stocks on Wall Street: Chesapeake Energy (CHK)
Short Interest Ratio: 7
Market Capitalization: $5.4 billion
The most recent data shows that 207 million shares of Chesapeake Energy (CHK) are currently sold short. The oil and natural gas producer is also feeling the pain from merely existing in the industry, with shares down more than 70% in the last year.
Not only have shares fallen off the proverbial cliff in the last year — traders are actually getting more bearish on it. Nearly 6 million additional shares have been shorted since the last official data were released, a 3% increase.
As with Transocean, CHK is well-poised to benefit from a short squeeze if there’s a sustainable rally in energy prices … but until then, expect Chesapeake shares to be in a world of pain.
Most Hated Stocks on Wall Street: JCPenney (JCP)
Short Interest Ratio: 7.3
Market Capitalization: $2.8 billion
If you’ve been following stocks that people really hate for the last several years, you’ll be intricately familiar with JCPenney (JCP). Nearly 100 million shares are sold short, or roughly one-third of the stock’s current float.
The beleaguered retailer has been reeling from former Apple (AAPL) exec Ron Johnson’s disastrous turnaround attempts for years now; apparently figuring out that you should sell Steve and The Woz’s gadgets in a store didn’t translate to instant success in the department store business. Go figure.
After bringing back former CEO Myron Ullman to clean up the mess, he swiftly got the retailer back on the right track … then promptly left the debt-ridden company in the hands of former Home Depot (HD) exec Marvin Ellison.
JCP is on the upswing, however, with shares up an impressive 45% so far this year.
Most Hated Stocks on Wall Street: Vale (VALE)
Short Interest Ratio: 7.8
Market Capitalization: $25 billion
Vale (VALE) stock, like CHK and RIG, has the ignominious distinction of losing more than 60% of its value in the last year.
Some 211 million of the 3.14 billion shares in its float are sold short, and with average daily volume of roughly 27 million, it would take an average of nearly 8 trading days for all the shorts to unwind their positions at this point in time.
Of course, it’s not like investors are clamoring to get a piece of a company like Vale: Brazilian iron ore, coal, copper, and other materials haven’t been the best investments of late, with commodities prices plunging and Brazilian inflation spiraling out of control.
Most Hated Stocks on Wall Street: Advanced Micro Devices (AMD)
Short Interest Ratio: 10.5
Market Capitalization: $1.4 billion
Looking for a way to invest in the plummeting market of personal computers? Look no further than Advanced Micro Devices (AMD), the dated chipmaker with heavy exposure to an industry in blatant decline.
When being second-best to Intel (INTC) is your claim to fame, you can’t blame the company for grasping at straws, which is probably why a recent rumor that AMD was considering splitting itself in two or spinning off part of its business was met with a sigh of relief.
Nothing ever materialized out of the rumors, though. Today, 137 million shares are sold short, meaning it would take more than 10 days for bears to fully cover in the case of a squeeze.
Most Hated Stocks on Wall Street: Peabody Energy (BTU)
Short Interest Ratio: 10.6
Market Capitalization: $750 million
There are 96 million shares of Peabody Energy (BTU) that no one believes in. 96 million shares with no fanfare. 96 million shares … sold short.
If you’re the type of person who likes to look at the bright side of things … well, you may want to reconsider your reading habits because this article has an overwhelmingly negative focus.
But there is a silver lining to BTU’s short interest: It’s down by 6% since last measured.
While that short-term trend may continue, given a recent surprise investment by billionaire hedge fund manager George Soros, the long-term trend is decidedly negative. Coal mining is a thankless industry, especially in the U.S. — which increasingly finds issue with the toxic environmental- and health-related concerns that surround the natural resource.
Most Hated Stocks on Wall Street: Blackberry (BBRY)
Short Interest Ratio: 21.4
Market Capitalization: $4 billion
With 103 million shares of Blackberry (BBRY) sold short, Blackberry is the second-most hated stock on Wall Street. A love-it-or-hate-it sort of company, less than 5 million shares are traded on average daily, meaning that given typical volume, it would take more than four trading weeks for all the shorts to flee their positions.
Once upon a time, Blackberry was the king of mobile devices … only to be quickly usurped by the Apple iPhone. After peaking at more than $230 per share back in 2007, the stock has steadily bitten the dust and now sits below $8 per share.
Bulls are hoping that Blackberry’s software and messaging applications can revive the company, but clearly, not all on Wall Street are convinced.
Most Hated Stocks on Wall Street: Mannkind (MNKD)
Short Interest Ratio: 21.6
Market Capitalization: $1.6 billion
Finally, the most hated name in the stock market today: MannKind (MNKD). 121.8 million shares of the biotech company are sold short, or a sky-high 45.6% of the 267 million-share float.
It edges out BBRY as the mainstream stock with the highest short interest ratio in the stock market today.
It’s somewhat odd, because MNKD actually has an FDA-approved product on the market, Afrezza. Afrezza is an inhalable insulin approved to treat both type 1 and type 2 diabetes, which sounds great in theory. The problem is, MannKind’s partnership with Sanofi (SNY) hasn’t yielded much in the way of sales.
The second quarter was just the first full quarter that Afrezza had been on the market, but still, the $2.2 million in sales were dramatically lower than expected, and the market is finding a multibillion-dollar valuation hard to justify.
As of this writing, John Divine was long shares of MNKD and RIG stock. You can follow him on Twitter at @divinebizkid or email him at firstname.lastname@example.org.