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Nov. 30, 2019, 10:59 a.m. EST

Here are Wall Street’s most-shorted stocks — and how they’ve performed, in one chart

Communications services is the most shorted sector: Bespoke Investment Group

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By William Watts, MarketWatch


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With U.S. stocks up around 25% so far this year, it would appear to be have been a tough year for short sellers. But a breakdown of the most shorted large-cap stocks indicates Wall Street’s nabobs of negativity have enjoyed a somewhat more upbeat story.

In a Tuesday note, analysts at Bespoke Investment Group observed that Russell 1000 /zigman2/quotes/210598144/delayed RUI +0.48% stocks with more than 20% of their float sold short have seen total returns of 14.81% so far in 2019. That’s a solid gain, though it lags the returns of more than 25% posted by large-cap indexes, including the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.47% , over the same time. That means shorts “have done OK on a relative basis,” the analysts wrote.

Compare that with the least-shorted stocks in the index, which are up 31.27% in 2019 to date, the analysts noted, more than double the return of the most heavily shorted stocks.

An investor can bet against a company by borrowing a stock and selling it on the open market, with the intention of buying it back later at a lower price. Heavy short interest is viewed by some investors as a potentially contrarian indicator. Moves to the upside by unpopular stocks can be accelerated when short sellers are forced to scramble and buy the shares to get out of a losing position.

Bespoke lists the most heavily shorted stocks, sorted by percentage of their float sold short, in the table below:


Bespoke Investment Group

Online-dating company Match Group Inc. /zigman2/quotes/207178501/composite MTCH -1.02% isn’t getting many investor love letters, with nearly 59% of its float sold short, topping the list. Shares have had a bumpy ride lately, declining 4.4% this month and nearly 19% over the last three months, but the stock has still run up a return of more than 60% in 2019.

Overall, 4.9% of the Russell 1000’s float is sold short, the analysts said, with communications services the most heavily shorted sector, at 7.5%. Utilities are the least targeted by short sellers, with 3% of that sector’s float sold short.

Among individual companies, shares of alcoholic-beverage producer Brown-Forman Corp. /zigman2/quotes/209049280/composite BF.A +0.51% are the least shorted stock in the index. Just 0.2% of the company’s float is sold short, Bespoke said. Brown-Forman shares have enjoyed a 36.5% return so far this year.

Other prominent stocks on the least-shorted list include Nike Inc. /zigman2/quotes/203439053/composite NKE +0.45% (0.6% of float sold short), Johnson & Johnson /zigman2/quotes/201724570/composite JNJ -0.13% (0.64%), Philip Morris International Inc. /zigman2/quotes/201611010/composite PM +0.50% (0.66%), PepsiCo Inc. /zigman2/quotes/208744353/composite PEP -0.05% (0.69%), Altria Group Inc. /zigman2/quotes/208895754/composite MO -0.18% (0.7%), Microsoft Corp. /zigman2/quotes/207732364/composite MSFT +0.30% (0.82%) and Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN +0.67% (0.82%).

In an interesting wrinkle, the Bespoke analysts noted that, while tobacco companies like Altria and Philip Morris certainly aren’t popular among market participants focused on ESG investors — funds and individuals limiting their investments to companies that score acceptably on environmental, social and corporate-governance metrics — “their high dividend yields (which shorts have to pay) help keep the shorts away.”

/zigman2/quotes/210598144/delayed
US : US Composite
1,875.24
+9.00 +0.48%
Volume: 2.69M
Feb. 19, 2020 6:51p
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/zigman2/quotes/210599714/realtime
US : S&P US
3,386.15
+15.86 +0.47%
Volume: 1.73B
Feb. 19, 2020 5:05p
loading...
/zigman2/quotes/207178501/composite
US : U.S.: Nasdaq
$ 75.92
-0.78 -1.02%
Volume: 1.50M
Feb. 19, 2020 4:00p
P/E Ratio
41.96
Dividend Yield
N/A
Market Cap
$21.29 billion
Rev. per Employee
$1.15M
loading...
/zigman2/quotes/209049280/composite
US : U.S.: NYSE
$ 67.65
+0.34 +0.51%
Volume: 12,261
Feb. 19, 2020 6:30p
P/E Ratio
38.04
Dividend Yield
1.03%
Market Cap
$32.33 billion
Rev. per Employee
$689,375
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/zigman2/quotes/203439053/composite
US : U.S.: NYSE
$ 102.46
+0.46 +0.45%
Volume: 6.20M
Feb. 19, 2020 6:30p
P/E Ratio
35.90
Dividend Yield
0.96%
Market Cap
$159.57 billion
Rev. per Employee
$529,466
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/zigman2/quotes/201724570/composite
US : U.S.: NYSE
$ 148.94
-0.20 -0.13%
Volume: 6.12M
Feb. 19, 2020 6:30p
P/E Ratio
26.45
Dividend Yield
2.55%
Market Cap
$391.99 billion
Rev. per Employee
$603,509
loading...
/zigman2/quotes/201611010/composite
US : U.S.: NYSE
$ 87.88
+0.44 +0.50%
Volume: 4.37M
Feb. 19, 2020 6:30p
P/E Ratio
19.07
Dividend Yield
5.33%
Market Cap
$136.73 billion
Rev. per Employee
$382,519
loading...
/zigman2/quotes/208744353/composite
US : U.S.: Nasdaq
$ 145.53
-0.07 -0.05%
Volume: 2.98M
Feb. 19, 2020 4:00p
P/E Ratio
28.01
Dividend Yield
2.62%
Market Cap
$202.22 billion
Rev. per Employee
$242,172
loading...
/zigman2/quotes/208895754/composite
US : U.S.: NYSE
$ 45.14
-0.08 -0.18%
Volume: 5.89M
Feb. 19, 2020 6:30p
P/E Ratio
N/A
Dividend Yield
7.44%
Market Cap
$83.87 billion
Rev. per Employee
$2.36M
loading...
/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 187.28
+0.56 +0.30%
Volume: 30.00M
Feb. 19, 2020 4:00p
P/E Ratio
32.60
Dividend Yield
1.09%
Market Cap
$1424.46 billion
Rev. per Employee
$902,473
loading...
/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 2,170.22
+14.55 +0.67%
Volume: 2.56M
Feb. 19, 2020 4:00p
P/E Ratio
94.28
Dividend Yield
N/A
Market Cap
$1080.36 billion
Rev. per Employee
$359,671
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William Watts is MarketWatch's deputy markets editor, based in New York. Follow him on Twitter @wlwatts.

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