The average stock in the large-cap Russell 1,000 has 4.9% of its float sold short. As shown below, Communication Services is the most heavily shorted sector, followed by Consumer Discretionary and Energy. Utilities has the lowest short interest levels along with other relatively high yielding sectors like Financials and Real Estate. For the Financials, it has been a big change since the Credit Crisis when the sector was one of the most heavily shorted areas of the market.
Below is a list of the most heavily shorted individual stocks in the Russell 1,000. Each of the stocks listed in the table have at least 20% of their float sold short.
Investors don’t believe in love at first click as online dating company Match Group (MTCH) is at the top of the list with nearly 59% of its float sold short. Cloud “Customer Experience Management” company Medallia (MDLA) is the second most heavily shorted stock with 46.6% of its float sold short, while home and business security company ADT ranks third at 37.5%. Other notables on the list include retailers and other consumer discretionary names like Nordstrom (JWN), Dick’s (DKS), Macy’s (M), Mattel (MAT), Grubhub (GRUB), World Wrestling Entertainment (WWE) and of course, Tesla (TSLA).
Coincidentally, there are four single-letter stock tickers on the list of most heavily shorted stocks, and three of them are W, X, and Z. If only Alleghany (Y) had made it, we’d have the last four letters of the alphabet covered! That will be a long time coming, though, because Alleghany (Y) is actually the 18th least shorted stock in the Russell 1,000 with just 0.77% of its float sold short.
Brown-Forman (BF/A) is the least shorted stock in the Russell 1,000 with just 0.20% of its float sold short. Nike (NKE), Johnson & Johnson (JNJ), Philip Morris International (PM), PepsiCo (PEP), Altria (MO), Microsoft (MSFT), and Amazon (AMZN) are other notable names on the list of least shorted stocks. While tobacco companies like MO and PM certainly aren’t popular in the ESG space, their high dividend yields (which shorts have to pay) help keep the shorts away.
In terms of performance, the Russell 1,000 stocks with more than 20% of their float sold short have posted total returns of 14.81% so far in 2019. While that’s a solid gain, it’s less than the 25%+ that large-cap indices have returned, meaning the shorts have done okay on a relative basis. The 35 least shorted stocks are up 31.27% year-to-date, which is more than double the return of the most heavily shorted stocks. Want to see Bespoke’s most actionable insights in real-time? Start a two-week free trial to Bespoke Premium for immediate access.