Here is a roundup of some of the hottest stocks from a securities lending perspective, according to data from FIS' Astec Analytics. Astec Analytics provides up-to-date, intraday
short-selling market insight via securities lending analytics, helping users gauge changes in investor sentiment.
Top Pick: Frontier communications
Rounding up the hottest stocks among short sellers is a new company to Astec's list, Frontier Communications Corp
(NASDAQ: FTR), a provider of voice, broadband and video
services.
Since the start of 2016, shares of Frontier have lost 24 percent and closed last week at $3.56, which is nearly 40 percent below
its 12-month highs.
Short selling peaked back in November, coinciding with the stock's 52-week low of $3.21. However, as a percentage of available
supply, short selling activity hit almost 90 percent last week, suggesting a "mistimed sale by long investors."
2. Cliffs Natural Resources
Cliffs Natural Resources Inc (NYSE: CLF) has seen its
stock soar more than 500 percent from its 12-month lows to its 12-month highs, yet the stock is still very far removed from its
five-year highs of $76 a share.
Since the middle of 2016, short sellers have been active in closing their positions and banking profits, but this trend reversed
in mid-November when short selling activity rose around 33 percent from the 12-month lows.
Astec noted that while short interest in the iron ore producer remains at a level that is half of its 12-month high, the recent
uptick in activity appears to indicate "there may be more yet to the Cliffs story."
3. Crane
Short selling in Crane Co. (NYSE: CR) recently hit a
12-month high, although volume remains very low as a percentage of shares available it nearly doubled in volume over the past
week.
Short sellers appear to be positioning themselves for a correction after the stock broke through a five-year high last week.
Astec suggested that the next few weeks will signal if the increase in short selling marks the start of a reversal in the
stock.
4. Under Armour
Under Armour Inc (NYSE: UA.C) (NYSE: UAA) launched
last week a new line of smart footwear that reinforces the
company's commitment to footwear as a growth area for the company.
However, shares lost 8 percent on the week, bringing its total 12-month decline to nearly 30 percent. Short sellers have been
slowly closing their positions since the start of November as a percentage of available supply volumes are unchanged.
5. Tesla Motors
Shares of Tesla Motors Inc (NASDAQ: TSLA) traded
above the $200 per share mark once again, which prompted short sellers to retreat. Although this may signal a positive development
for longs, the fact remains that more than 80 percent of the shares available in the market remain borrowed — is just slightly
below the 12-month average of 4 percent.
6. Restoration Hardware
Restoration Hardware Holdings Inc (NYSE: RH) closes
out Astec's list of the hottest shorts.
Restoration Hardware's stock has fallen around 60 percent over the past year and the company's poor outlook announcement for the
fourth quarter and 2017 dealt a blow to longs. Short sellers reacted to the announcement by adding a further 12 percent to their
positions by volume, which indicates that short sellers believe Restoration Hardware's stock will continue to decline.
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