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10 Most Shorted Stocks to Watch

In this article, we discuss the 10 most shorted stocks to watch today. To take a look at some more stocks, go directly to the 5 Most Shorted Stocks to Watch.

The US stock market has been in a correction mode as the S&P 500 Index and the Dow 30 Index have lost more than 18% and 14% of their value YTD, respectively. Meanwhile, The NASDAQ Composite Index has entered the bear market territory with a fall of 27% YTD. Rising inflation, interest rate hike, supply chain disruptions due to COVID-19-related lockdowns in China, and the Russia-Ukraine conflict are the major negative developments that are taking a toll on the market sentiments. Under these circumstances, investors have initiated short positions in leading companies to benefit from the fall in their stock prices. Some of the most shorted stocks include Heron Therapeutics, Inc. (NASDAQ:HRTX), Conn’s, Inc. (NASDAQ:CONN), and Citi Trends, Inc. (NASDAQ:CTRN).

Photo by Stephen Dawson on Unsplash

Our Methodology

The stocks have been ranked according to the percentage float shorted as of April 28, 2022. We have discussed the business fundamentals and analyst ratings to provide context regarding investment decisions.

Data from over 900 hedge funds in Insider Monkey’s database was used to analyze the hedge fund sentiment concerning each stock as of Q4 2021.

10. JOANN Inc. (NYSE:JOAN)

Float Shorted: 37.40%

Number of Hedge Fund Holder Holders as of December 31: 15

JOANN Inc. (NYSE:JOAN) is a Hudson, Ohio-based specialty retailer of crafts and fabrics. The company was founded in 1943 and went public in 1969. It was taken private by hedge fund Leonard Green and Partners in 2011 following a $1.6 billion deal that burdened the company with a significant amount of debt.

JOANN Inc. (NYSE:JOAN) revealed that the company had been impacted by supply-chain disruptions due to Covid-19 and had to absorb close to $60 million in higher ocean freight costs last year. It further elaborated that retail traffic has also declined due to the omicron variant of Covid-19. The Russia-Ukraine conflict is adding to the inflationary pressures being faced by JOANN Inc. (NYSE:JOAN). JOANN Inc. (NYSE:JOAN) posted revenue of $735.3 million for Q4 2021, down from $840.8 million a year ago.

As of Q4 2021, 15 hedge funds held a stake in JOANN Inc. (NYSE:JOAN).

9. Gogo Inc. (NASDAQ:GOGO)

Float Shorted: 39.99%

Number of Hedge Fund Holders as of December 31: 20

Gogo Inc. (NASDAQ:GOGO) is a Broomfield, Colorado-based provider of in-flight broadband internet service. Since the start of the year, the stock price of Gogo Inc. (NASDAQ:GOGO) has been up nearly 35%. However, its 52-week high in mid-April has fallen by over 21%. The demand for customizable entertainment services and connectivity in the aviation industry is increasing due to longer international flights because of the airspace restriction following the start of the Russia-Ukraine conflict.

However, Gogo Inc. (NASDAQ:GOGO) is faced with strong competition from the likes of Starlink. In April, SpaceX’s Starlink announced an agreement with Hawaiian Airlines for the provision of free inflight Wifi. Previously, Starlink had also conducted Wifi tests with JSX and Delta Airlines. Analyst Greg Gibas at Northland opined that the long-term competition is expected to grow for Gogo Inc. (NASDAQ:GOGO) if Starlink targets the business aviation market.

Ewing Morris Investment Partners discussed its stance on Gogo Inc. (NASDAQ:GOGO) in its Q4 2021 investor letter. Here’s what the investment management firm said:

“The core strategy remains to focus on compounders.  As a reminder, a Compounder is a business that has…

– A durable competitive advantage
– Attractive profit margins
– Double-digit growth potential
– Strong management team

And these continue to make up the bulk of our portfolio. Let’s take Gogo as an example. Gogo has a near-monopoly providing internet on private jets in North America. The business has fantastic economics and is consistently growing at double-digit rates. And the stock trades at 12.5x cash earnings. It’s very unusual to find such a good business trading at such a low price. These are the kinds of compounders that we own.  Most of the time, when a value investor has an exciting idea, it fits one of two profiles. The first, is what we call time arbitrage. This is a situation where a good business is facing a short-term, fixable issue. And if you just have enough patience, you will be rewarded. But that’s not the case at Gogo. The business is firing on all cylinders…” (Click here to see the full text)

8. Big 5 Sporting Goods Corporation (NASDAQ:BGFV)

Float Shorted: 40.80%

Number of Hedge Fund Holders as of December 31: 14

Big 5 Sporting Goods Corporation (NASDAQ:BGFV) is an El Segundo, California-based sporting goods retailer with over 430 stores spread across various states in the US.

Since the start of this month, Big 5 Sporting Goods Corporation (NASDAQ:BGFV) stock has fallen over 16%. The company is expected to come under pressure due to rising inflation. There are concerns about whether Big 5 Sporting Goods Corporation (NASDAQ:BGFV) would be able to keep its costs under control and how the customers would react if the increase in cost is passed on to them. As products offered by Big 5 Sporting Goods Corporation (NASDAQ:BGFV) are discretionary, it could face a significant headwind due to inflation.

The hedge funds appear to have a bearish outlook on Big 5 Sporting Goods Corporation (NASDAQ:BGFV). The number of hedge funds holding a stake in Big 5 Sporting Goods Corporation (NASDAQ:BGFV) decreased from 17 in Q3 2021 to 14 in Q4 2021.

7. Verve Therapeutics, Inc. (NASDAQ:VERV)

Float Shorted: 43.57%

Number of Hedge Fund Holders as of December 31: 20

Verve Therapeutics, Inc. (NASDAQ:VERV) is a Cambridge, Massachusetts-based biotech company that was founded in 2018 and is focused on finding treatments for heart diseases. The company provides a new single-course gene-editing treatment to replace the current model of treating cardiovascular diseases.

Verve Therapeutics, Inc. (NASDAQ:VERV) stock has lost over 58.8% of its value over the last year. Previously, there have been concerns regarding board adoption of gene editing, which analysts believe would limit Verve Therapeutics, Inc.’s (NASDAQ:VERV) revenue growth. On April 14, Dae Gon Ha at Stifel reduced the price target on Verve Therapeutics, Inc. (NASDAQ:VERV) from $58 to $34 while maintaining a Hold rating.

Overall, 20 hedge funds held a stake in Verve Therapeutics, Inc. (NASDAQ:VERV) at the end of Q4 2021, up from 17 in the previous quarter.

6. Beyond Meat, Inc. (NASDAQ:BYND)

Float Shorted: 44.04%

Number of Hedge Fund Holders as of December 31: 19

Beyond Meat, Inc. (NASDAQ:BYND) is a Los Angeles, California-based manufacturer of plant-based meat substitute products in the beef, chicken, and pork categories. Investors who have shorted the stock would be reaping benefit from their position as Beyond Meat, Inc. (NASDAQ:BYND) has lost 30% of its value since the start of this month.

Analysts are not bullish on the stock as Benjamin Theurer at Barclays downgraded Beyond Meat, Inc. (NASDAQ:BYND) from an Overweight to an Equal-weight rating and slashed the target price from $80 to $25. The analyst termed Beyond Meat, Inc.’s (NASDAQ:BYND) Q1 2022 results as “disappointing” and saw the Q2 2022 guidance as “less upbeat” than anticipated.

In its Q3 2021 investor letter, Singular Research mentioned Beyond Meat, Inc. (NASDAQ:BYND). Here’s what it had to say about the company:

BYND also was a low performer as the company warned of lower sales in the third quarter due to the delta variant and supply chain disruptions. The firm was also downgraded by Credit Suisse to Underperform from Neutral.”

In addition to Beyond Meat, Inc. (NASDAQ:BYND), stocks such as Heron Therapeutics, Inc. (NASDAQ:HRTX), Conn’s, Inc. (NASDAQ:CONN), and Citi Trends, Inc. (NASDAQ:CTRN) are amongst the most shorted stocks right now.

 

Click to continue reading and see the 5 Most Shorted Stocks to Watch.

 

 

 

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Disclose. None. 10 Most Shorted Stocks to Watch is originally published on Insider Monkey.



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