Aphria Tops List Of Hot Stocks Among Short Sellers

FIS Astec Analytics released its latest weekly list of the hottest stocks among short sellers, and cannabis stocks continue to have the attention of short sellers.

Cannabis Crash

Enthusiasm for cannabis stocks has dropped since recreational marijuana was legalized in Canada. Since Oct. 15, the ETF MANAGERS TR/TIERRA XP LATIN AME MJ is down 28.9 percent, and short sellers continue to pile into what they see as overvalued marijuana plays.

According to FIS Astec, short sellers have recently shifted their focus on top short idea Aphria Inc APHA, which is down 48.8 percent in the past month. Short sellers are betting on more downside ahead, and FIS Astec reports short interest volume is up 226 percent since the beginning of October. The stock’s utilization rate now stands at 88 percent.

FIS Astec says the sell-the-news trend in pot stocks since Canadian legalization and Aphria’s recent acquisition of Colombian cannabis producer LATAM have been red flags for short sellers.

“The combination of these two facts has attracted the attention of short sellers as some observers question the validity of the transaction, some going as far as suggesting it was a mechanism to move cash from shareholders to owners,” FIS Astec wrote.

Aphria made its debut at the top of FIS Astec’s list this week, but cannabis beverage stock New Age Beverages Corp NBEV is a familiar name on the top shorts list. FIS Astec said New Age’s short interest volume was up 29 percent last week, while its utilization dropped to 88 percent.

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Other Short Stocks

Sirius XM Holdings Inc SIRI returned to this week’s list after a two-week absence. Utilization ticked higher from 96 percent to 97 percent on the week.

Arlo Technologies Inc ARLO is another top short idea this week. FIS Astec said utilization for the cloud-based services company jumped from 73 percent in late August to as high as 98 percent in mid-October before settling at 85 percent as of last week.

After a one-month absence, Chinese auto company Nio Inc - ADR NIO returned to the hottest shorts list this week after utilization increased by 2 percent and short volume grew by 13 percent in the past month.

Finally, short sellers are betting it won’t be a happy holiday sales season for retailer J C Penney Company Inc JCP. Last week, short volume dropped 5 percent and utilization dropped to 95 percent. Some short sellers may simply be taking profits on the stock, which is already down 25.0 percent in the past three months.

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