The Most Shorted Sub Industries
Author:
Ihor Dusaniwsky
Managing Director of Predictive Analytics, S3 Partners
Matthew Unterman
Director of Predictive Analytics, S3 Partners
Stock markets have been extraordinarily volatile in September, with the early month rally completely obliterated by the correction later in the month. Short sellers have reversed direction and, after buying to cover $16 billion of their short positions from 8/31 to 9/12, they sold $19 billion of new shorts from 9/12 to 9/21. Worldwide short interest, which was $1.37 trillion on 8/31, rose to $1.40 trillion with mark-to-market increases and offsetting short covering. Today it stands at $1.31 trillion on 9/21 with mark-to-market decreases and offsetting short selling.
Worldwide short interest declined by $63 billion in September with most sub-industries (81% of the 159 sub-industries) having declines in short interest. Changes in short selling was not as one-sided, with 58% of all sub-industries having net short selling and 42% having net short covering. 96% of all sub-industries had a decline in the mark-to-market value of their shorted shares.
Like using a boat’s fish finder to locate schools of large fish, we can use the S3 Black App to look for profitable sub-industries on the short-side that are seeing increased short selling – winning trades where traders are increasing their bets.
We are looking for sub-industries with increased net short selling, September short -side returns over +10% and short selling replacing at minimum 40% of the mark-to-market decline of the value of shares shorted. Like a good craps player, we are looking for a hot table where betters are backing up their bets. There are 16 sub-industries that meet these metrics. Meanwhile, there are 73 sub-industries with increased net short selling and +10% September profitability, but the dollar value of the new short selling was a small portion of the mark-to-market declines of their shares shorted. There are several sub-industries that did have $250 million of increased short selling in September.
More information for each sub sector can be found in the tables that follow.
Short Interest by Sub Industry
Worldwide Sub Industry
9/21/22 Short Interest
Change Shares Shorted
Change Mark-to-Market
Sept MTM P\L
P\L %
Steel
$13,291,208,925
$1,187,482,349
$(917,208,325)
$899,044,678
13.26%
Marine
$8,259,882,480
$1,248,541,102
$(1,041,785,281)
$1,064,571,122
25.15%
Forest Products
$866,566,679
87,263,150
$(78,092,790)
$84,806,776
19.37%
Heavy Electrical Equipment
$2,959,183,964
$459,014,314
$(413,741,604)
$430,205,745
28.64%
Mortgage REITs
$2,346,795,417
$125,408,863
$(143,864,505)
$145,018,584
12.46%
Textiles
$238,882,751
$12,310,156
$(16,193,786)
$15,757,400
13.41%
Paper Products
$1,273,166,827
$50,880,152
$(69,849,888)
$65,063,905
10.38%
Trading Companies & Distributors
$12,701,972,483
$453,165,823
$(747,273,631)
$747,889,712
12.06%
Advertising
$2,961,216,747
$106,765,845
$(177,718,447)
$176,506,924
12.21%
Security & Alarm Services
$739,316,471
$43,237,072
$(77,708,815)
$78,868,915
22.38%
Wireless Telecomm Services
$7,610,993,311
$210,675,367
$(388,989,872)
$384,069,928
10.33%
Household Appliances
$2,922,864,730
$138,737,334
$(258,310,619)
$255,170,951
18.21%
Aluminum
$1,319,304,223
$103,630,314
$(193,982,926)
$201,259,167
32.75%
Health Care Distributors
$3,413,241,972
$80,247,366
$(180,526,822)
$175,030,542
10.57%
Hotel & Resort REITs
$1,625,551,075
$37,814,245
$(87,318,347)
$ 90,774,331
11.52%
Electronic Manufacturing Services
$1,571,288,963
$29,788,999
$(73,514,315)
$79,470,886
10.40%
Stocks with the Highest Short Interest by Sub Industry
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
Vale SA *
VALE3 BZ
Steel
$2,240,538,078
$935,143,313
Fortescue Metals Group
FMG AU
Steel
$753,913,339
$117,137,417
Nippon Steel Corp
5401 JP
Steel
$377,418,022
$71,308,909
Arcelormittal
MTS SM
Steel
$717,489,588
$35,542,952
Arcelormittal
MT NA
Steel
$1,215,096,685
$31,697,727
*VALE3 BZ are increasing short selling into rising September stock prices (Sept MTM losses)
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
Nippon Yusen KK
9101 JP
Marine
$1,732,296,402
$490,913,231
Mitsui OSK Lines Ltd
9104 JP
Marine
$1,249,319,797
$373,395,599
Kuehne + Nagel Intl AG
KNIN SW
Marine
$613,725,267
$129,513,480
Evergreen Marine Corp Ltd
2603 TT
Marine
$108,812,803
$98,272,042
COSCO Shipping Holdings Co
1919 HK
Marine
$449,270,517
$60,583,727
Kawasaki Kisen Kaisha Ltd
9107 JP
Marine
$465,904,735
$59,301,556
Yang Ming Marine Transport
2609 TT
Marine
$400,585,837
$56,401,584
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
West Fraser Timber Co Ltd
WFG US
Forest Products
$205,048,093
$37,663,724
West Fraser Timber Co Ltd
WFG CN
Forest Products
$66,273,798
$17,700,980
Interfor Corp
IFP CN
Forest Products
$46,579,172
$16,700,796
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
Siemans Energy AG
ENR GR
Heavy Electrical Equipment
$625,916,131
$363,307,169
Doosan Enerbility Co Ltd
034020 KS
Heavy Electrical Equipment
$178,236,837
$49,303,495
NEL ASA
NEL NO
Heavy Electrical Equipment
$187,352,739
$37,935,692
Alfen Beheer BV
ALFEN NA
Heavy Electrical Equipment
$38,062,227
$22,368,244
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
ARMOUR Residential REIT
ARR US
Mortgage REITs
$86,636,783
$24,495,638
Annaly Capital Mgt Inc
NLY US
Mortgage REITs
$331,428,506
$23,137,677
Arbor Realty Trust Inc
ABR US
Mortgage REITs
$135,538,177
$13,919,116
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
Aksa Akrilik Kimya Sanayii AS
AKSA TI
Textiles
$27,718,881
$7,020,972
Eklat Textile Co Ltd
1476 TT
Textiles
$33,962,424
$4,896,999
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
Stora Enso Oyj
STERV FH
Paper Products
$161,696,382
$49,329,534
Suzano SA
SUZB3 BZ
Paper Products
$239,298,958
$41,553,141
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
ITOCHU Corp
8001 JP
Trading Companies & Distributors
$2,401,682,852
$223,111,440
Mitsui & Co Ltd
8031 JP
Trading Companies & Distributors
$1,166,889,222
$151,409,200
Mitsubishi Corp
8058 JP
Trading Companies & Distributors
$986,745,961
$117,788,575
Marubeni Corp
8002 JP
Trading Companies & Distributors
$393,030,992
$54,716,659
Rexel SA
RXL FP
Trading Companies & Distributors
$207,660,315
$50,645,443
Seven Group Holdings Ltd
SVW AU
Trading Companies & Distributors
$117,495,442
$30,995,544
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
Publicis Groupe
PUB FP
Advertising
$179,516,612
$53,279,946
Dentsu Group Inc
4324 JP
Advertising
$380,754,647
$42,397,616
Informa PLC
INF LN
Advertising
$45,325,324
$25,869,965
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
Securitas AB B
SECUB SS
Security & Alarm Services
$247,139,201
$36,659,532
S-1 Corporation
012750 KS
Security & Alarm Services
$13,399,259
$5,749,144
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
KDDI Corporation
9433 JP
Wireless Telecommunication Services
$1,139,111,863
$163,426,890
T-Mobile U.S., Inc
TMUS US
Wireless Telecommunication Services
$2,123,632,987
$67,778,562
Softbank Group Corp
9984 JP
Wireless Telecommunication Services
$1,610,570,584
$36,355,542
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
Electrolux AB B
ELUXB SS
Household Appliances
$480,052,063
$86,532,278
SEB SA
SK FP
Household Appliances
$48,995,326
$20,621,107
iRobot Corporation
IRBT US
Household Appliances
$409,196,037
$14,977,291
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
Alcoa Corporation
AA US
Aluminum
$479,410,315
$48,743,431
Alumina Ltd
AWC AU
Aluminum
$134,667,862
$26,860,498
Norsk Hydro ASA
NHY NO
Aluminum
$161,426,239
$25,800,833
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
Cardinal Health Inc
CAH US
Health Care Distributors
$518,876,413
$94,299,242
AdaptHealth Corp
AHCO US
Health Care Distributors
$255,311,917
$43,950,856
Galenica AG
GALE SW
Health Care Distributors
$41,269,632
$25,492,729
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
Host Hotels & Resorts Inc
HST US
Hotel & Resort REITs
$392,862,960
$26,218,550
Ryman Hospitality Properties Inc
RHP US
Hotel & Resort REITs
$132,779,545
$6,357,744
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
Hon Hai Precision Industry Co
2317 TT
Electronic Manufacturing Services
$91,691,651
$24,942,786
Venture Corporation Ltd
VMS SP
Electronic Manufacturing Services
$48,625,174
$8,473,687
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
Amazon.com Inc
AMZN US
Internet & Direct Marketing Retail
$9,308,546,720
$847,740,470
Alibaba Group Holding Ltd
BABA US
Internet & Direct Marketing Retail
$4,521,171,053
$148,538,030
Meituan B
3690 HK
Internet & Direct Marketing Retail
$1,966,088,872
$129,223,837
Naspers Ltd
NPN SJ
Internet & Direct Marketing Retail
$112,288,145
$92,275,224
Delivery Hero SE
DHER GR
Internet & Direct Marketing Retail
$311,128,650
$70,316,601
JD.com Inc
9618 HK
Internet & Direct Marketing Retail
$964,432,742
$66,260,096
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
Microsoft Corp
MSFT US
Systems Software
$10,224,358,670
$536,290,539
VMware Inc
VMW US
Systems Software
$490,004,505
$68,162,214
ServiceNow Inc
NOW US
Systems Software
$1,471,484,217
$55,588,421
Trend Micro Inc
4704 JP
Systems Software
$789,379,768
$50,302,278
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
ASML Holding NV
ASML NA
Semiconductor Equipment
$2,607,871,996
$638,518,539
Lasertec Corporation
6920 JP
Semiconductor Equipment
$249,312,501
$95,795,921
Advantest Corporation
6857 JP
Semiconductor Equipment
$530,499,160
$76,037,585
Tokyo Electron Ltd
8035 JP
Semiconductor Equipment
$897,596,848
$57,926,645
BE Semiconductor Industries NV
BESI NA
Semiconductor Equipment
$188,315,420
$54,531,141
Applied Materials Inc
AMAT US
Semiconductor Equipment
$962,922,691
$51,361,066
Stock
Ticker
Sub Industry
9/21/22 Short Interest
Change Shares Shorted
Alstom SA
ALO FP
Construction Machinery & Heavy Trucks
$1,077,217,751
$159,860,779
Volvo AB B
VOLVB SS
Construction Machinery & Heavy Trucks
$553,684,829
$64,141,501
Caterpillar Inc
CAT US
Construction Machinery & Heavy Trucks
$917,209,500
$43,053,701
These stocks are all in play on the short side – they have all had increases in short selling in sub-industries that have had a net increase in short selling. They are a mixture of macro (sub-industries with higher short-side conviction) and micro (the specific stocks that short sellers have singled out with trading activity) stock selection. They have the potential to be names that can additions to the short side of a portfolio or a reason to increase exposure in existing short positions.