We’ve seen increased short selling over the last thirty days in every U.S. sector. The Materials sector has had the fourth largest increase in short selling over the last thirty days and the Chemicals Industry had the largest increase in short selling of the five Materials industries.

PCT is the 11th largest short in the Chemicals Industry:

And is the most Crowded and Squeezable stock in the Materials sector:

Shorting the Materials sector was generally a profitable trade with short sellers in the sector up +$378 million for the year, +2.50%. But there was a large bell curve in profitability with winning trades up +36% on average and losing trades down -19% on average.

The most and least profitable Materials short trades for the year are:

PCT is a very Crowded short with SI % Float of 31.01% versus the U.S. average of 4.64%; stock borrow fee of 20.08% fee versus U.S. average of 0.50% fee; and thirty-day DTC of 15.77 versus U.S. median of 2.53. And the overlay of -13.9% seven-day mark-to-market return and -60.5% thirty-day mark-to-market return makes the stock extremely squeezable. There may be forced buy-to-covers hitting the tape if PCT’s stock price holds these elevated levels.

On the long side, using the S3 Map product, we see that PCT is widely held by both Passive and Active institutional investors even though it is a minimally indexed stock and not in the large S&P, Russell, or Nasdaq indexes. Even though PCT is not in many indexes it is widely held by small cap funds.

We see that Passive institutional investors are holding 36.2% of PCT’s outstanding shares. Investment Advisors are holding 25% of the stock, Mutual Funds hold 10% and Private Banking\Wealth Management hold 1%. The largest holders being Vanguard, Longview Asset Mgt. and Blackrock.

Active institutional investors hold 34.9% of the PCT’s outstanding shares. Hedge Funds are holding 28% of the stock, Investment Advisors hold 5% of the stock and Brokers hold 1% of the stock. The largest holder being Sylebra Capital.

If retail and institutional small cap investment continues to increase, we should see holdings in these Passive accounts grow and add buy-side pressure to the stock which should buoy PCT’s stock price.

There are less than half million shares of PCT available to borrow, which means that virtually all the long shares in Passive accounts, which actively lend their long portfolios, and in Active accounts, whose long stocks in margin accounts are actively lent out by the prime brokers, have already been lent out to the street. Due to this lack of stock borrow supply and high stock borrow cost (25%+ fee for new stock borrows) there will be limited short selling in the near future and therefore limited downside stock price pressure by short sellers.

PCT’s high level of squeezability due to large recent mark-to-market losses, limited ability to sell short and potential increased buy-side activity by small cap investors points to price support at these levels.

Our Blacklight SaaS platform and Black App provides an up-to-date view of short selling and short covering on an equity, sector, index, or country-wide basis allowing investors\traders to better manage their existing long and short positions.

The Black MaP and Black App products provide a total view of long and short positioning in the market with a breakdown between Active\Passive long investors, 24 Fund type entities, over 50k securities globally across 108 countries and data from 58 regulatory exchanges.

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