Are These The Highest Short Interest Stocks To Buy Right Now?
Investors in the stock market who are bearish on a particular stock will often times express their opinion by shorting the stock. This is done by borrowing shares of the stock from another investor, selling the stock, and then repurchasing it at a lower price in order to return the shares to the original owner. The difference in price is the profit made from the short sale.
What Is Stock Shorting?
When an investor short sells a stock, they are selling a borrowed security and hoping to buy the same security back at a lower price so they can return it to the lender and pocket the difference. For example, let’s say that an investor short sells 100 shares of XYZ corporation at $10 per share. Then, XYZ’s stock price falls to $8 per share. The investor buys the shares back at $8 and returns them to the lender, pocketing $200 in the process.
Although shorting stocks can be profitable, it is also a risky move because there is theoretically no limit to how high the stock price can go. As a result, short sellers may end up having to pay much more for shares than they originally sold them for, leading to significant losses.
What Is Short Interest?
Short interest is simply the total number of shares that have been sold short divided by the outstanding shares of that stock. A high short interest indicates that there are a lot of investors who are bearish on that particular stock. Stocks with high short interest can be volatile since there is a lot of potential for a short squeeze. This was evident, back during the GameStop (NYSE: GME) and AMC (NYSE: AMC) short squeeze mania.
A short squeeze occurs when there is sudden buying pressure, which drives up the price of a stock, forcing investors who are short to buy back the shares at a higher price to cover their positions. This can oftentimes result in a rapid increase in stock price. If you’re interested in finding the highest shorted stocks in the stock market today, here are three making headlines.
Highest Short Interest Stocks To Watch Now
Bed Bath & Beyond
First, up on the list, let’s check out the large retailer Bed Bath & Beyond (BBBY). Shares of BBBY stock have surged over 40% during Monday’s trading session. BBBY stock is currently trading at $11.18 per share. This comes after retail traders who hang around social media platforms like Reddit’s WallStreetBets are back to betting against wall street professionals and the Federal Reserve as rallies for meme stocks like Bed Bath & Beyond Inc. garner a lot of attention on Monday.
- BBBY Short Interest: 28,557,134
- Short Date: 7/15/2022
- Float: 61,563,991
- Percentage Of Float Shorted: 46.39%
Moving along, back in June BBBY reported its first quarter fiscal results. In detail, the company posted a loss of $2.83 per share on revenue of $1.5 billion. The consensus estimate was a loss of $1.33 per share on revenue of $1.5 billion. As a result, BBBY missed its earnings expectations for the quarter.
Ms. Gove commented, “I step into this role keenly aware of the macro-economic environment. In the quarter there was an acute shift in customer sentiment and, since then, pressures have materially escalated. This includes steep inflation and fluctuations in purchasing patterns, leading to significant dislocation in our sales and inventory that we will be working to actively resolve. The simple reality though is that our first quarter’s results are not up to our expectations, nor are they reflective of the Company’s true potential. The initiatives we are instituting today are just the first steps in putting our business on firm footing to drive our future success.” With all the buzz surrounding BBBY stock, will you add it to your watchlist right now?
Following that, we have Beyond Meat (BYND). Beyond Meat is a leading provider of plant-based meats, such as burgers, sausage, ground beef, and chicken. Unlike other vegetarian products, Beyond Meat seeks to replicate the look, cook, and taste of meat is targeted at omnivores and vegetarians alike and is sold in the meat case. The products are widely available across the U.S. and Canada and in 83 additional countries as well. Just last week BYND reported its second quarter fiscal results.
BYND Short Interest: 21,531,654
Short Date: 7/15/2022
Percentage Of Float Shorted: 37.91%
Diving in, Beyond Meat (BYND) reported a loss of $1.53 per share on revenue of $147.0 million for the second quarter. The analysts’ consensus estimate was a loss of $1.22 per share on revenue of $151.7 million. Additionally, the company provided some guidance outlook. In detail, Beyond Meat said it projects a range for 2022 revenue of $470.0 million to $520.0 million. Previously, the company reported guidance of revenue in the range of $560.0 million to $620.0 million. Meanwhile, the current consensus revenue estimate is $564.54 million for the 2022 full year.
Beyond Meat President and CEO Ethan Brown commented, “In Q2 2022, we recorded our second largest quarter ever in terms of net revenues even as consumers traded down among proteins in the context of inflationary pressures, and we made solid sequential progress on reducing operating and manufacturing conversion costs.” On Monday, shares of BYND stock are up over 4% at $40.08 a share. Considering this, would you add BYND to your list of the highest shorted stocks to watch now?
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Lastly, let’s check out Revlon (REV). In short, Revlon is among the leading global beauty companies, with some of the world’s most iconic and desired brands and product offerings in color cosmetics, skincare, hair color, hair care, and fragrances. Some of its most notable brands include Revlon, Revlon Professional, Juicy Couture, Elizabeth Taylor, Britney Spears, and Christina Aguilera to name a few. For a sense of scale, Revlon’s diversified portfolio of brands is sold in almost 150 countries globally.
REV Short Interest: 4,689,337
Short Date: 7/15/2022
Percentage Of Float Shorted: 60.47%
In the last month of trading, REV stock has rallied over 48% and currently trades at $8.52 a share as of Monday. This rally comes on the heels of a bankruptcy court permitting the cosmetics company to proceed with its $1.4B loan. Specifically, the cash is supported to help the company keep its operations running, while it continues to move through Chapter 11. REV Stock hit a 52-week low of $1.08 in mid-June just prior to filing for bankruptcy. With that, is REV stock a buy now?