Short interest figures for the first half of February were released after the close, and earlier today we sent out our update to clients which highlights key trends from each semi-monthly report. One trend worth pointing out is the performance of the most heavily shorted stocks. For much of 2014 and the first month of 2015, the most heavily shorted stocks were big dogs, underperforming the overall market by a wide margin. This month, however, we have seen a complete, although at this point temporary, reversal of that trend.
The table below shows the month to date performance of stocks in the S&P 1500 with more than 25% of their free-floating shares sold short. For each stock, we have also included its performance so far this month. As shown, the average performance of the stocks listed is a gain of 11.16% this month (median +6.84%), or nearly double the return of the S&P 1500. We have also seen strong breadth in these names as just ten of the 37 stocks listed are down in February. On the upside, there have been some big winners among the most shorted as ten are up more than 20%, and four of those are up over 40%! Unlike the past few months, February has not been kind to the shorts. For bulls, the key will be to see whether this outperformance of the most heavily shorted stocks can continue.