6 Hot Stocks Poised For A Short Squeeze

SunGard's Astec Analytics delivers intraday short-selling market data via securities lending analytics. In a report recently sent out to clients, the firm shared a "roundup of some of the hottest stocks from a securities lending perspective."

This week’s Astec Analytics' top pick from a securities lending perspective was Macy's, Inc. M.

Other stocks that that saw plenty of short-selling activity included the following:

• International Business Machines Corp. IBM
• Exxon Mobil Corporation XOM
• Cliffs Natural Resources Inc CLF
• Square Inc SQ
• Fitbit Inc FIT

Here's a look at Karl Loomes' list of top stocks in the Americas from a security lending perspective.

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Macy’s

The famed retailer was this week’s top pick, as its traditional Thanksgiving Day Parade, Black Friday and “the litmus test looking towards the Christmas season” once again brought focus on it.

Investors seemed quite optimistic ahead of the holiday, with the stock price surging mildly ahead of the big day. However, from a securities lending perspective, Astec’s data suggest that “this was also matched by increased short selling activity – borrowing volumes climbed 11 percent between the Monday and Wednesday sessions,” the report explicated.

International Business Machines

The computing giant moved up to number one this week. The company continued to get attention after Warren Buffett’s Berkshire Hathaway disclosed a new increase in its exposure to the stock.

However, it should be noted that the week started to see a small rise in borrowing volumes, which suggests increased short selling activity. In fact, the number of IBM shares being borrowed rose 7 percent in the week.

Exxon Mobil

Another stock that escalated on the list this week was Exxon. The U.S. oil major saw renewed focus after a few SEC filings showed senior insiders selling the stock.

This move “allows management to shore up the company’s finances in order to make ad hoc payments if necessary – bolstering the company’s share price,” Loomes expounded.

Meanwhile, on the securities lending front, the firm’s data show “borrowing volumes have continued to slide steadily throughout November, now down 18 percent on the month.”

Cliffs Natural Resources

Down in the list but still in focus was Cliffs. After “halting iron ore production at some of its facilities, Cliffs continued to see its share price suffer in the shortened week as selling pressure outweighed any demand to buy,” the note explained.

“Even more telling, however, on the borrowing front, our data hints at continuing and growing short selling activity and demand to borrow the stock.” Borrowing volumes have already surged 22 percent during the past week, while the cost of borrowing the shares has climbed from roughly 18 percent to an impressive almost 85 percent.

Square

The recently public mobile payment services company made it to the list for the first time this week. Astec’s data hint that initially, demand to borrow was quite elevated, with the cost of borrowing above the 50 percent mark. Moreover, Loomes noted, the number of shares being borrowed in the couple of days represented more than 70 percent of all the stock available on loan.

Fitbit

Finally, there’s FitBit, which received some attention after analysts at Barclays upgraded the stock from Equal-Weight to Overweight. However, the share price’s reaction was somewhat mixed, since a few senior insiders disposed of the stock, increasing the pressure in the cash market.

“On the borrowing front, the trend was somewhat clearer, however, with the number of FIT shares being borrowed climbing 41 percent in the past two weeks,” the note concluded.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.