The Latest Top Hot Short Ideas: Sears And Credit Acceptance

FIS Astec Analytics has released its latest weekly report on the hottest stocks among short sellers from the previous week. Here’s a look at how this week’s list shifted compared to last week’s list.

Top Pick: Sears Holdings

FIS Astec attributes much of the recent buying in Sears Holdings Corp SHLD to insider buying, but short sellers also closed roughly 6 percent of open positions last week. Still, utilization dropped just 1 percent to 94 percent on the week, making the stock the hottest play among short sellers.

1. Credit Acceptance Corp

Credit Acceptance Corp. CACC is heavily-exposed to the subprime auto lending market, and short sellers recognize the inherent danger of the business. FIS Astec reports that the number of outstanding short shares has increased 43 percent in the past two weeks and volumes have hit a 12-month high.

2. Cara Therapeutics

FIS Astec reports short interest as a percentage of Cara Therapeutics Inc CARA shares available has rarely fallen below 80 percent since September. The firm predicts that institutional investors may finally be taking profits on their long positions.

3. Omeros Corp

Omeros Corporation OMER short sellers were burned last week when positive trial data sent the share price soaring 31 percent. Still, the company’s pattern of quarterly earnings losses has kept it among the most popular stocks for short sellers.

4. JC Penney

Fis Astec says short sellers recognize what they see as a secular decline in Sears and J C Penney Company Inc JCP and are willing to wait out their positions for the long haul. Borrowing costs jumped 38 percent for the popular short last week, but short sellers have also profited plenty of gains to combat the fees during the stocks 42 percent decline in the past year.

5. British American Tobacco

British American Tobacco PLC (ADR) BTI shorts have had a rough go of it in 2017 with the stock up more than 17 percent year-to-date. However, FIS Astec reports that short interest as a percent of available shares stayed above 90 percent throughout much of March, suggesting that short sellers are still confident that the stock is headed south at some point.