Market Overview

Cliffs Natural Shares Are Hot Hot Hot For Shorts, And So Are These Other 5

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Cliffs Natural Shares Are Hot Hot Hot For Shorts, And So Are These Other 5

Astec Analytics is a provider of timely and accurate intra-day short-selling data and information, which helps investors better understand changes in investor sentiment.

This week's report includes a few of the same companies that were highlighted in the prior report along with new entrants.

Top Pick: Cliffs Natural Resources

Given the more than 500 percent surge in Cliffs Natural Resources Inc (NYSE: CLF), the stock attracts the attention of short sellers, especially after last week's 27 percent gains.

Dating back to June 2016, around 20 percent (approximately 55 million shares) of Cliffs' stock was being borrowed. However, as of the end of last week, the amount of shares being borrowed was less than 8 million.

While there may be signs of recovery in the U.S. rust belt which bodes well for iron companies like Cliffs, it is still important to keep the stock's price in context as it was trading north of $70 per share five years ago versus a 52-week low of just $1.72.

1. Crane

Short sellers have been riding both the highs and lows of Crane Co. (NYSE: CR) over the past year. Short interest did peak in August but then fell sharply — only to rise once again toward the end of 2016. Meanwhile, short sellers remain confident that the current stock level cannot be sustained over the longer term.

2. Under Armour

Holding on to the number two spot from last week, Under Armour Inc (NYSE: UA) (NYSE: UAA) has seen its stock close last week up $21.60. However, short interest has fallen by 8 percent as of late but this doesn't translate to a bullish indication for the stock.

Granted, the volume of short interest fell around 8 percent, the number of shares short as a percentage of the available supply actually rose 8 percent.

Short sellers remain optimistic that further gains can be made in the stock which could fall even further.

3. Tesla

Tesla Inc (NASDAQ: TSLA) is the ultimate example of a bull versus bear story and as such the automaker isn't a stranger to the hottest short list.

Short interest levels hit an all-time high in the week before last but the stock keeps on moving higher amid high expectations for the Model 3 sedan and the company's expansion into India. However, short interest began to fall last week and moved down around 8 percent by volume.

Related Link: 6 Hot Stocks Among Shorts: IBM, Exxon Mobil And More

While an 8 percent decline isn't necessarily huge it does mark the single largest decline since October of 2016 and could indicate that short sellers have "thrown in the towel" and accepting losses on their short position.

4. Globalstar

Globalstar, Inc. (NYSE: GSAT), a wireless communications provider, makes its debut in the hot short list.

Back in December of last year the stock soared over 100 percent to $1.58 and closed last week at $1.35. Meanwhile, over the past 12 months, short sellers have "kept a steady but slow level of increase."

On Tuesday, the number of shares borrowed has reached its maximum, which indicates short sellers are expecting a decline in the stock on top of the already year-to-date fall of around 8 percent.

5. Cara Therapeutics

Finally, making the hot short list is Cara Therapeutics Inc (NASDAQ: CARA), a clinical stage biopharmaceutical company that specializes in pain relief.

Until last September the short interest in the stock has been "very slowly increasing" from a low base. At the start of 2017 short interest volume rose 36 percent and drove utilization above 95 percent.

Short sellers have been piling into the stock under the assumption that the stocks' strong surge cannot be sustained over the longer term.

 

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