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The Latest Hot Stocks In Short-Selling Circles Include Twitter, Prometic Life And Tesla

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The Latest Hot Stocks In Short-Selling Circles Include Twitter, Prometic Life And Tesla

Every week, FIS' Astec Analytics provides its clients with intra-day short-selling market data. The firm's top pick from a securities lending perspective this week was Twitter Inc (NYSE: TWTR).

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

  • ProMetic Life Sciences Inc. (TSE:PLI)
  • Chesapeake Energy Corporation (NYSE: CHK)
  • Tesla Motors Inc (NASDAQ: TSLA)
  • Seadrill Ltd (NYSE: SDRL)
  • Sunedison Inc (NYSE: SUNE)

Below is a look at a list of top stocks in the Americas from a security lending perspective.

Twitter

Shares closed last week 65 percent lower than a year earlier. This drove borrow volumes up about 12.5 percent over the past week, while the stock price remained relatively flat.

"'Where now' seems a common refrain for Twitter – with a mixed strategy and ongoing trouble monetizing its massive client base, the future is far from clear for this once pivotal social media stock," the report said.

ProMetic Life Sciences

"Biotechnology companies are perennial favorites of the hedge fund industry due to the potentially huge returns," Astec explained. However, with the potential for high returns, comes the potential for great risk.

New funding and high expectations for the year to come have driven shares of ProMetic up recently, helping it turn retrace the losses seen in January. Such a turnaround tends to lead short-sellers to close their positions. However, this was not the case for ProMetic. As the stock got close to its all-time high of CA$3.54, borrow volumes actually rose by a couple of percentage points. "Increased borrowing indicates an expectation that a share is overvalued, so Prometic may yet be set to give back some of its most recent gains," the experts said.

Chesapeake Energy

Chesapeake held the second spot in Astec's list. Early signs of a recovery and falling borrow volumes were suggesting a recovery in the prior week. The last couple of weeks saw borrow volumes decline by 15 percent and 14 percent, respectively. Now, levels stand within 5 percent of the 12­-month low; this marks a considerable turnaround in sentiment since the start of the year.

Related Link: 6 Stocks Trending In Short-Selling Circles: Seadrill, Tesla, Weight Watchers And More

While the stock made big advances, it's still far from its 12­-month high of more than $16.50.

Tesla Motors

After hitting a 12-month low on February 12, shares have been "on a near consistent bull run."

"Closing last week at $232.74, Tesla chalked up gains of 62 percent from its low point, recording an $89 a share loss for those short the shares at that point. With more than 28 million shares on loan over that period, this translates into nearly $2.5 billion of unrealized losses," Astec explain.

It should be noted that more than 75 percent of these short positions were assumed when the stock was trading above $260. This means "there is potentially still some headroom left to go before the net losses start to mount."

While many short hedge funds might be regretting not having closed out in February, the past is the past. Last week, borrow volumes rose an extra 3 percent, "signaling that the short side is far from cowed by the recent price rises and is banking on a future correction to put it back in the money."

Seadrill

The recent recovery in the stock price led short-sellers to close their positions, as about 20 percent of shorts left the company. Over the past week, most of them returned as the stock fell below $30 once again.

"With borrow volume back to 75 percent of the 12­-month high and borrow costs remaining very high indeed, short-sellers' nerves remain on edge as they wait to see which direction Seadrill shares go next," Astec said.

SunEdison

SunEdison has had a scalding year, with shares closing last week at $2.13. Last week, management announced that it was once again extending the deadline for the reporting of the company's full year 2015 earnings, "following weaknesses identified in accounting controls and the statements of financial position for the beleaguered company."

As the stock price collapsed, short-sellers made huge gains. However, bad news doesn't seem to be over.

Over the past week, borrow volumes rose to levels barely shy of their 12-month highs. "Although the costs to borrow SunEdison remains high, a net 91.3 percent drop in the share price compared with one year ago gives the short sellers plenty of unrealized profits to pay their fees," Astec concluded.

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

Latest Ratings for TWTR

DateFirmActionFromTo
Feb 2020Aegis CapitalMaintainsHold
Feb 2020Canaccord GenuityMaintainsHold
Feb 2020Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for TWTR
View the Latest Analyst Ratings

Posted-In: Astec Analytics FISAnalyst Color Short Ideas Analyst Ratings Trading Ideas Best of Benzinga

 

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