6 Hottest Stocks Among Shorts: IBM, Fitbit, Under Armour And More

FIS' Astec Analytics provides up-to-date, intra-day short selling market insight via securities lending analytics, helping users gauge changes in investor sentiment. This is a roundup of some of the hottest stocks from a securities lending perspective

Top Pick: IBM

The "relentless rise" of short interest activity seen in International Business Machines Corp. IBM shouldn't be overlooked.

FIS noted that by the middle of August, the stock hit a peak of $163.53 and by the end of the month the short interest stood just 30 percent above the 12-month lows. Since then the short interest has grown consistently as IBM's stock fell below the $150 mark on October 21. Following that, at the end of each week a new peak of short interest was recorded.

As a percentage of supply, the short interest in IBM is relatively low but there is a committed demand of shorts that may see something concerning that other investors are overlooking.

Cliffs Natural Resources

Short interest in Cliffs Natural Resources Inc CLF has been decreasing over the past 12 months.

Cliffs, along with many other mining stocks, benefited from the post-election surge. Over the same time period, short sellers as a whole are already holding onto positions near a 12-month low and trimmed their positions by 3 percent.

Crane

Crane Co. CR has seen its stock gain around 47 percent over the past 12 months, with 60 percent of that gain taking place since the end of October. However, as the stock pushed above the $60 and $70 per share mark, short sellers returned to the stock.

Under Armour

Under Armour Inc UA was FIS' top short pick two weeks ago, but the stock has since recovered and gained around 3 percent last week.

Short volume is running at 96 percent of the available supply which makes Under Armour a hard borrow to find so borrowing costs are on the rise. In fact, last week borrowing costs rose 39 percent as lenders took advantage of the limited supply.

Fitbit

Fitbit Inc FIT continues to operate in a highly competitive environment, not to mention ongoing skepticism over the accuracy of the health tracking device and consumer fatigue, pushed Fitbit's stock to its all time-lows.

Short sellers and long investors appear to have sensed a floor price as short sellers reduced their positions as a whole by 14 percent by volume. In addition, short interest fell as a proportion of the shares available from 96 percent to 70 percent as new institutional supply has since become available.

Twilio

Twilio Inc's TWLO stock is trading much closer to its IPO price than its all-time highs. However, as is typically the case with newly released shares, short supply is hard to find. Nevertheless, short sellers took advantage of new supply last week and the overall short positions rose by 23 percent.