Most & Least Shorted Stocks Ahead Of Earnings

Many investors look at short interest to determine the market sentiment related to a particular stock. Changes in short interest reflect changes in sentiment.

This article will look into a few companies scheduled to report earnings over the next week, which have relatively high levels of short interest – according to a recent Bloomberg report.

Related Link: These 3 Stocks Are Seeing Short-Selling Activity Rise

People's United Financial, Inc. PBCT is the most shorted stock among U.S. traded companies reporting earnings this week, even though short interest fell 0.16 percent over the past week. 16.24 percent of the company’s free float is being shorted at the time, 21.4 percent more than a month ago. This means that the market is becoming increasingly bearish on the stock.

Another heavily shorted stock is Fastenal Company FAST. The company is scheduled to report its second quarter financial results Tuesday and, although expectations point towards a year-over-year growth in earnings of 7 percent or more, the market sentiment seems to be inclined towards pessimism.

After seeing short interest rise almost 1 percent in the past week, Fastenal’s short interest as a percentage of its free float ascends to 14.27 percent.

W W Grainger Inc GWW comes in third, with 14.1 percent of its free float sold short. This figure implies a 1.35 percent decline in short interest in relation to last week, but an increase of almost 10 percent when compared to last month.

The company will report its earnings Friday and, according to Estimize, the Street is expecting to see a small year-over-year decline in earnings, to $3.05 per share, on almost flat sales of $2.531 billion.

Completing the top five are Mattel, Inc. MAT and M&T Bank Corporation MTB, with short interest as a percentage of float rates of 11.47 percent and 11.09 percent, respectively. Both surged over the past week and month.

On the other hand, the two least shorted stocks reporting earnings this week are UnitedHealth Group Inc. UNH and Wells Fargo & Co WFC. These companies’ respective short interest rates stand at 0.31 percent and 0.34 percent, even though they both saw short interest climb considerably over the past week and month.