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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.
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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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