Watch List: Top 10 Most (And Least) Shorted S&P 500 Stocks


(List compiled by Flladina Dibra)

Here's a quick update on a few of the major trends affecting the market.

What we know is that economic recovery has faltered, that the US’s fiscal situation is concerning and that Eurozone debt woes are increasingly alarming.

Furthermore, investors have picked up on increasingly divided opinions within the Fed’s economists. While most members agree that the end of the second round of monetary stimulus was necessary, a few members believe that additional stimulus is needed to support growth if it continues to be weak. 

But other members are more worried about inflation risks which may prompt the Fed to tighten monetary policy sooner than expected.

Uncertainty has plagued the Fed too and we must wait till August 9th, the next date for the Fed meeting, to have a clearer glimpse into the future. 

Moreover, another deadline looming over the US and investors is August 2, the date when Congress will vote on raising the debt ceiling.

Rating agencies have lost patience with political skirmishes. Moody’s warned that an unsatisfactory outcome to the debt ceiling talks may lead the agency not only to downgrade the US sovereign AAA but to also to put the US on a negative outlook for the future.

What's more, European debt woes are also haunting the US from across the ponds as financial conditions for Greece, Portugal and Ireland worsen. Investors are now eyeing Italy which could be the next target for a bailout. A default would further debilitate banks which have a significant exposure to the indebted European countries.

The earnings season has started but has yet to pick up its pace. Despite the economic concerns, major indexes have rallied and valuations are robust. JPMorgan reported its second quarter this morning which beat expectations, setting a positive augur for the second season.

Looking for ideas? To help you get started, we collected data on the S&P 500 index, and identified the top 10 most and least shorted names in the index.

Short sellers are very sophisticated investors that bet on stocks to lose value. A high short float means that a significant portion of a company's shares are being shorted, a signal that short sellers think a stock will fall in value.

By contrast, a low short float means that short sellers have avoided a stock, a signal that the potential upside may outweighs the downside.

Use this list as a starting point for your own analysis.

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The Top 5 Least Shorted S&P 500 Stocks (Bullish Signal)

1. CSX Corp. (CSX): Railroads Industry. Market cap of 28.52B. PEG ratio at 1.22. Float short at 0.36%, which implies a short ratio of 0.4 days.

2. Public Service Enterprise Group Inc. (PEG): Diversified Utilities Industry. Market cap of 16.21B. PEG ratio at 4.17. Float short at 0.53%, which implies a short ratio of 1.01 days.

3. Discover Financial Services (DFS): Credit Services Industry. Market cap of 14.26B. PEG ratio at 1.04. Float short at 0.56%, which implies a short ratio of 0.47 days.

4. PG & E Corp. (PCG): Diversified Utilities Industry. Market cap of 16.89B. PEG ratio at 3.14. Float short at 0.56%, which implies a short ratio of 0.8 days.

5. Oracle Corp. (ORCL): Application Software Industry. Market cap of 165.59B. PEG ratio at 1.38. Float short at 0.62%, which implies a short ratio of 0.88 days.


The Top 5 Most Shorted S&P 500 Stocks (Bearish Signal)

1. First Solar, Inc. (FSLR): Semiconductor Industry. Market cap of 10.79B. PEG ratio at 0.9. Float short at 39.34%, which implies a short ratio of 11.81 days.

2. GameStop Corp. (GME): Electronics Stores Industry. Market cap of 3.43B. PEG ratio at 0.78. Float short at 24.49%, which implies a short ratio of 8.19 days.

3. Netflix, Inc. (NFLX): Music & Video Stores Industry. Market cap of 15.68B. PEG ratio at 2.83. Float short at 20.42%, which implies a short ratio of 2.2 days.

4. Lennar Corp. (LEN): Residential Construction Industry. Market cap of 3.37B. PEG ratio at 1.02. Float short at 17.52%, which implies a short ratio of 7.67 days.

5. Urban Outfitters Inc. (URBN): Apparel Stores Industry. Market cap of 5.09B. PEG ratio at 1.1. Float short at 17.01%, which implies a short ratio of 5.96 days.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Investing Ideas



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