Thought the GameStop (GME) stock mania was game over? You need to pay attention to Reddit again.
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More than three-quarters of the 10 most shorted stocks in the S&P 1500 index, including GameStop stock, National Beverage (FIZZ) and Tanger Factory Outlet Centers (SKT), are topping the S&P 500 in the past week, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. The rally is coming following a major correction in many of these stocks swept up in a massive short-squeeze in January.
Video-game seller GameStop is the headliner.
GameStop Stock: Back In Play
Shares of GameStop continue to set the pace of the short-squeeze and attempted recovery.
The stock doubled in regular trading Wednesday to 91.70 as fans of the struggling retailer pile back in for no apparent reason. And it rallied sharply again Thursday, soaring 36% to 124.85. All told, GameStop shares are up 193.5% — in a week. The S&P 500 is up just 0.1% in the past week.
Such buying activity has a massive effect on a stock like GameStop as it’s the most highly shorted stock on the S&P 1500. It comes just days after the unexpected departure of the company’s chief financial officer.
More than 47% of GameStop’s shares available for trading, or float, are controlled by investors betting it will fall. That’s actually down dramatically from January, when more shares were shorted than existed. But it’s still much higher than the average for most stocks of 4.5% of shares controlled by shorts.
When they’re wrong, the shorts must buy back in to cut their losses.
Keep in mind, though, shares of GameStop are still down 75% from their Reddit-fueled high in January.
It’s Not Just GameStop
Reddit traders are making another run at a number of other highly shorted stocks.
LaCroix seller National Beverage, still up 21% this year, is up 1.7% the past week. It’s the second most shorted short with 45% of shares available for trading in short sellers’ control. Keep in mind, though, the stock is still 48% below its 52-week high.
But that’s a small rise next to the one-week 17.2% gain in Tanger Factory Outlet. The shares are 41% shorted. And another shorted darling is AMC Networks (AMCX). The stock is up 9.9% this past week, adding to its 55% year-to-date gain. AMC Networks is not to be confused with theater chain AMC Entertainment (AMC).
Just remember, pushing stocks around as a group might be entertaining. But long-term investors know to stick with high-quality leading stocks to maximize their profits.
Highly Shortly Stocks Rising Again
Most of the most-shorted stocks are topping the S&P 500 the past week
| Company | Ticker | Short Interest As A % Of Float | Stock 1-Week % Ch.* | % Stock From 52-Week High | Sector |
|---|---|---|---|---|---|
| GameStop | (GME) | 47.5% | 193.5% | -75.3% | Consumer Discretionary |
| National Beverage | (FIZZ) | 45.2 | 1.7 | -47.6 | Consumer Staples |
| Tanger Factory Outlet Centers | (SKT) | 40.5 | 17.2 | -19.2 | Real Estate |
| Ligand Pharmaceuticals | (LGND) | 39.1 | 6.5 | -29.8 | Health Care |
| Fulgent Genetics | (FLGT) | 32.0 | -21.0 | -43.0 | Health Care |
| AMC Networks | (AMCX) | 31.5 | 9.9 | -24.0 | Communication Services |
| Zynex | (ZYXI) | 31.0 | 6.0 | -38.3 | Health Care |
| World Acceptance | (WRLD) | 30.5 | 5.8 | -23.1 | Financials |
| Tootsie Roll Industries | (TR) | 29.7 | 5.2 | -45.4 | Consumer Staples |
| Viasat | (VSAT) | 29.4 | -6.5 | -11.7 | Information Technology |
| S&P 500 | 0.1 | -0.5 |
Sources: IBD, S&P Global Market Intelligence, * – bold denotes outpacing the S&P 500
Follow Matt Krantz on Twitter @mattkrantz
