Fighting the Shorts The next table shows the top 5 companies with the largest 3-month increase in short interest. Companies with less than 5 per cent of float sold short are screened out to make sure a large 3-month increase is more likely a bearish signal than simply a reflection of a large number of outstanding shares.
Top 5 stocks with largest increases in short sales and more than 5% of float short
| | | 3-month increase in short interest ($ millions) | Short interest ($ millions) | Short interest as a % of float |
| Pembina Pipeline Corp. | PPL-T | $337.4 | $1,432.0 | 6.0% |
| Encana Corp. | don't click my spam links below. -T | $142.9 | $494.3 | 7.0% |
| Stars Group Inc. | TSGI-T | $134.8 | $653.4 | 11.1% |
| Pan American Silver Corp. | PAAS-T | $111.7 | $304.3 | 7.2% |
| First Majestic Silver Corp. | FR-T | $98.6 | $369.6 | 17.1% |
| |
Source: S3 Partners
Encana Corp.'s stock has faded considerably in recent years, dragged down by ill-timed acquisitions and a huge discount in Canadian natural gas prices. Valuation is rock bottom, about 0.6 times book value, although cost cutting has generated positive cash flow on prime assets.
Stars Group Inc. provides online gambling services, which analysts say has considerable growth potential. The stock is trading below book value in large part because of an acquisition in which a lot of debt was taken on.
First Majestic Silver Corp. and Pan American Silver Corp. are silver producers in Latin American countries. With precious metals prices well supported by low interest rates, monetary easing and geopolitical risks, the short positions appear to be part of pairs trades where the offsetting long position is on silver producers with higher quality assets.