Tags: Bespoke | September | short sellers | S&P

Bespoke Investments: A September to Remember for Short Sellers

By    |   Monday, 29 September 2014 12:24 PM

September gains have been like "shooting fish in a barrel" for short sellers, according to Bespoke Investment Group, which tracked the monthly performance of the most heavily shorted stocks.

Of the 27 stocks in the S&P 1500 that have more than 25 percent of their public shares sold short, all but six declined in share price through mid-September, which is a sweet result for those betting on the negative side of the market, Bespoke noted.

"As you can see from the results, if you are a short seller, it doesn't get much better than this," the investment firm stated.

"While the S&P 1500 is down 2.05 percent so far this month, the 27 most heavily shorted stocks in the index are down 11.57 percent."

The top September decliners among the most heavily short stocks, through mid-month, were ITT Educational, Carbo Ceramics, GT Advanced Technology, Paragon Offshore, Rubicon Technology and Cliffs Natural — all were down 23 percent or more in their stock price.

"It is also not just these stocks that are down sharply this month," Bespoke said, noting that the broader measure of the 150 stocks with the highest short interest as a percentage of float in the S&P 1500 were down an average of 7.17 percent by mid-month. "So far this month, it has been like shooting fish in a barrel for short sellers."

USA Today took the opposite point of view, and identified five stocks in the S&P 500 that have bucked the tide with short sellers in 2014.

"Short sellers — investors that make money when stocks they hate fall — are supposed to outsmart the rest of us. But a handful of stocks are making these investors look pretty dumb this year," the newspaper said.

"All told, the shorts have lost an estimated $925 million on just these five stocks — based on the number of shares that were being bet against at the beginning of the year."

USA Today identified those stocks, and their year-to-date gains, as:

Company % Gain YTD
Electronic Arts 56.8 percent
Alcoa 52.3 percent
U.S. Steel 40.7 percent
Frontier Communications 36.5 percent
Windstream 36.1 percent

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September gains have been like "shooting fish in a barrel" for short sellers, according to Bespoke Investment Group, which tracked the monthly performance of the most heavily shorted stocks.
Bespoke, September, short sellers, S&P
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2014-24-29
Monday, 29 September 2014 12:24 PM
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