Why are hedge funds shorting?

A HEDGE FUND is a securities fund which not only buys stocks for long-term price appreciation but also sells stocks short. The concept of short selling is injected to reduce risk during periods of market decline .

What stocks are being shorted by hedge funds?

Most shorted stocks: Ralph Lauren (RL), short interest as % of float 12.8% Paramount Global (PARA) 12.4% SolarEdge Technologies (SEDG) 12.1% American Airlines (AAL) 11.7% Pool (POOL) 11.3% CarMax (KMX) 10.7% Tractor Supply (TSCO) 10.4% Norwegian Cruise Line Holdings (NCLH) 10.3% More items... Nov 13, 2023

Why do most hedge funds fail?

Some strategies, such as managed futures and short-only funds, typically have higher probabilities of failure given the risky nature of their business operations. High leverage is another factor that can lead to hedge fund failure when the market moves in an unfavorable direction.

Are all hedge funds risky?

The Bottom Line. Hedge fund investing is considered a risky alternative investment choice and requires that investors can make a large minimum investment or have a high net worth. Hedge fund strategies involve investing in debt and equity securities, commodities, currencies, derivatives, and real estate.

Why not to invest in hedge funds?

Be careful with hedge funds There are a few warnings that come along with investments in hedge funds. The first is cost. Hedge funds often have high fees . A 2% management fee and 20% performance fee are not uncommon.

How long can hedge funds short a stock?

No regulations exist for how long a short sale can last before being closed out . A short sale occurs when shares of a company are borrowed by an investor and sold on the market. 1 The investor must return these shares to the lender at some point in the future.

Do hedge funds always short?

Hedge fund strategies range from long/short equity to market neutral.

How do hedge funds lose money on shorts?

A common example of the volatility of short selling is that if the asset price drops on the market the hedge fund will be able to profit on the difference, but if the asset increases in value then it will have to pay the difference , which can lead to severe losses.

Are hedge funds shorting Tesla?

Tesla could “go bust” while its stock could fall to $14, Per Lekander, a hedge fund manager who has been shorting Elon Musk's electric car maker since 2020 , told CNBC on Wednesday.

Why would an investor want to sell short?

Short selling is when a trader borrows shares and sells them, hoping the price will fall after so they can buy them back for cheaper . Shorting can help traders profit from downturns in stocks and protect themselves from losses.

23 stocks hedge funds are shorting like crazy (2024)

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Akin Oyedele

2015-05-21T16:19:00Z

With stocks crossing new highs ever so often these days, going short can be tricky.

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And traders at the big hedge funds have their targets on stocks they believe will tumble.

Goldman Sachs' latest Hedge Fund Trend Monitor identifies 50 stocks in its 'Very Important Short Position List.' It tracked the S&P 500 stocks with the highest total dollar value of short interest outstanding as of March 31.

23 stocks hedge funds are shorting like crazy (1)

The list uses the dollar value of short interest outstanding to gauge short portfolio holdings.

We've ranked the top 23 stocks by value of short interest, from smallest to largest.

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AbbVie

23 stocks hedge funds are shorting like crazy (2)

Ticker:ABBV

Sub-sector:Pharmaceuticals

Value of short interest:$1.7 billion

Short interest as a % of Float:2%

No. of funds with stock as Top 10 holding:14

Avg. portfolio weight when stock ranks among Top 10 holdings:6%

Recentnews:AbbVie acquired cancer drug maker Pharmacyclics for $261.25 per share in cash and stock – a deal worth $21 billion.

Source: Goldman Sachs

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salesforce.com

23 stocks hedge funds are shorting like crazy (3)

Ticker:CRM

Sub-sector:Application Software

Value of short interest:$1.8 billion

Short interest as a % of Float:4%

No. of funds with stock as Top 10 holding:6

Avg. portfolio weight when stock ranks among Top 10 holdings:6%

Recentnews:Salesforce shares jumped to an all-time high on Tuesday after a solid earnings report. The company has reportedly hired advisors to help with a potential takeover bid.

Source: Goldman Sachs

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Merck

23 stocks hedge funds are shorting like crazy (4)

Ticker:MRK

Sub-sector:Pharmaceuticals

Value of short interest:$1.9 billion

Short interest as a % of Float:1%

No. of funds with stock as Top 10 holding:7

Avg. portfolio weight when stock ranks among Top 10 holdings:5%

Recentnews: "Merck KGaA’s first-quarter earnings missed analyst estimates as the German manufacturer of drugs and specialty materials spent more on marketing and research as it tries to reinvigorate its pharmaceutical business," Bloomberg reported.

Source: Goldman Sachs

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Regeneron Pharmaceuticals

23 stocks hedge funds are shorting like crazy (5)

Ticker:REGN

Sub-sector:Biotechnology

Value of short interest:$2.0 billion

Short interest as a % of Float:6%

No. of funds with stock as Top 10 holding:2

Avg. portfolio weight when stock ranks among Top 10 holdings:8%

Recentnews:Regeneron and Sanofi announced positive results from a Phase 3 test of a drug to treat rheumatoid arthritis on Thursday.

Source: Goldman Sachs

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United Technologies

23 stocks hedge funds are shorting like crazy (6)

Ticker:UTX

Sub-sector:Aerospace & Defense

Value of short interest:$2.1 billion

Short interest as a % of Float:2%

No. of funds with stock as Top 10 holding:6

Avg. portfolio weight when stock ranks among Top 10 holdings:4%

Recentnews:The company is looking for buyers for its Sikorsky Aircraft business, which makes helicopters, according to the Wall Street Journal.

Source:Goldman Sachs

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Chevron

23 stocks hedge funds are shorting like crazy (7)

Ticker:CVX

Sub-sector:Integrated Oil & Gas

Value of short interest:$2.1 billion

Short interest as a % of Float:1%

No. of funds with stock as Top 10 holding:3

Avg. portfolio weight when stock ranks among Top 10 holdings:4%

Recentnews:Chevron posted a big beat on earnings and revenues in the first quarter like many other energy companies.

Source:Goldman Sachs

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Comcast

23 stocks hedge funds are shorting like crazy (8)

Ticker:CMCSA

Sub-sector:Cable & Satellite

Value of short interest:$2.1 billion

Short interest as a % of Float:1%

No. of funds with stock as Top 10 holding:12

Avg. portfolio weight when stock ranks among Top 10 holdings:9%

Recentnews:Comcast walked away from its bid to acquire Time Warner Cable for $45 billion. The merger would have created the country's biggest cable company.

Source:Goldman Sachs

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Twenty-First Century Fox

23 stocks hedge funds are shorting like crazy (9)

Ticker:FOXA

Sub-sector:Movies & Entertainment

Value of short interest:$2.2 billion

Short interest as a % of Float:4%

No. of funds with stock as Top 10 holding:9

Avg. portfolio weight when stock ranks among Top 10 holdings:5%

Recentnews:Berkshire Hathaway disclosed a stake of 4.7 million shares in Twenty-First Century Fox in February.

Source:Goldman Sachs

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Halliburton

23 stocks hedge funds are shorting like crazy (10)

Ticker:HAL

Sub-sector:Oil & Gas Equipment Services

Value of short interest:$2.3 billion

Short interest as a % of Float:5%

No. of funds with stock as Top 10 holding:7

Avg. portfolio weight when stock ranks among Top 10 holdings:5%

Recentnews:Halliburton reported an "unprecedented decline in drilling activity" in the first quarter due to the oil crash.

Source:Goldman Sachs

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Boeing

23 stocks hedge funds are shorting like crazy (11)

Ticker:BA

Sub-sector:Aerospace & Defense

Value of short interest:$2.3 billion

Short interest as a % of Float:2%

No. of funds with stock as Top 10 holding:2

Avg. portfolio weight when stock ranks among Top 10 holdings:3%

Recentnews:Chinese carrier Ruili Airlines and two leasing companies placed a $6 billion-order for 60 narrow-body jets, according to Time.

Source:Goldman Sachs

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General Electric

23 stocks hedge funds are shorting like crazy (12)

Ticker:GE

Sub-sector:Aerospace & Defense

Value of short interest:$2.3 billion

Short interest as a % of Float:2%

No. of funds with stock as Top 10 holding:2

Avg. portfolio weight when stock ranks among Top 10 holdings:3%

Recentnews:Chinese carrier Ruili Airlines and two leasing companies placed a $6 billion order for 60 narrow-body jets, according to Time.

Source:Goldman Sachs

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Exelon

23 stocks hedge funds are shorting like crazy (13)

Ticker:EXC

Sub-sector:Electric Utilities

Value of short interest:$2.6 billion

Short interest as a % of Float:9%

No. of funds with stock as Top 10 holding:5

Avg. portfolio weight when stock ranks among Top 10 holdings:5%

Recentnews:"Exelon Corp. and Pepco Holdings announced Monday [May 17] the companies would accept the conditions imposed by Maryland regulators on their proposed merger," the Baltimore Sun reported.

Source:Goldman Sachs

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Caterpillar

23 stocks hedge funds are shorting like crazy (14)

Ticker:CAT

Sub-sector:Construction Machinery & Heavy Trucks

Value of short interest:$2.7 billion

Short interest as a % of Float:5%

No. of funds with stock as Top 10 holding:2

Avg. portfolio weight when stock ranks among Top 10 holdings:3%

Recentnews:Caterpillar beat expectations on earnings and sales in the first quarter, and forecast lower sales in China for construction equipment.

Source:Goldman Sachs

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Deere & Co

23 stocks hedge funds are shorting like crazy (15)

Ticker:DE

Sub-sector:Agricultural & Farm Machinery

Value of short interest:$2.8 billion

Short interest as a % of Float:9%

No. of funds with stock as Top 10 holding:2

Avg. portfolio weight when stock ranks among Top 10 holdings:5%

Recentnews:Deere expects a 19% drop in sales in the second quarter due to falling crop prices.

Source:Goldman Sachs

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Johnson & Johnson

23 stocks hedge funds are shorting like crazy (16)

Ticker:JNJ

Sub-sector:Pharmaceuticals

Value of short interest:$3.0 billion

Short interest as a % of Float:1%

No. of funds with stock as Top 10 holding:6

Avg. portfolio weight when stock ranks among Top 10 holdings:3%

Recentnews:The strong dollar and other currency impacts caused first quarter sales to fall 4.1%.

Source:Goldman Sachs

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Pfizer

23 stocks hedge funds are shorting like crazy (17)

Ticker:PFE

Sub-sector:Pharmaceuticals

Value of short interest:$3.0 billion

Short interest as a % of Float:1%

No. of funds with stock as Top 10 holding:15

Avg. portfolio weight when stock ranks among Top 10 holdings:4%

Recentnews:Pfizer agreed to buy an $87.5 million stake in Dutch biotech company AM-Pharma, which is developing drugs to treat acute kidney disease.

Source:Goldman Sachs

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Exxon Mobil

23 stocks hedge funds are shorting like crazy (18)

Ticker:XOM

Sub-sector:Integrated Oil & Gas

Value of short interest:$3.2 billion

Short interest as a % of Float:1%

No. of funds with stock as Top 10 holding:4

Avg. portfolio weight when stock ranks among Top 10 holdings:2%

Recentnews:On Wednesday, Exxon Mobil announced a "significant discovery" of oil near Guyana.

Source:Goldman Sachs

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Kinder Morgan

23 stocks hedge funds are shorting like crazy (19)

Ticker:KMI

Sub-sector:Oil & Gas Storage & Transportation

Value of short interest:$3.3 billion

Short interest as a % of Float:5%

No. of funds with stock as Top 10 holding:11

Avg. portfolio weight when stock ranks among Top 10 holdings:6%

Recentnews: "More than 300,000 gallons of gasoline have leaked from Texas-based energy company Kinder Morgan’s pipeline in Belton, S.C., since a structure failure in December, according to the Savannah Riverkeeper [a non-profit,] the Savannah Morning News reported.

Source:Goldman Sachs

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Intel

23 stocks hedge funds are shorting like crazy (20)

Ticker:INTC

Sub-sector:Semiconductors

Value of short interest:$3.5 billion

Short interest as a % of Float:2%

No. of funds with stock as Top 10 holding:5

Avg. portfolio weight when stock ranks among Top 10 holdings:8%

Recentnews:Intel has reportedly signed a standstillagreementwith Altera that expires on June 1, according to Reuters. This gives the company the option to start an aggressive takeover bid.

Source:Goldman Sachs

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Verizon

23 stocks hedge funds are shorting like crazy (21)

Ticker:VZ

Sub-sector:Integrated Telecommunication Services

Value of short interest:$3.7 billion

Short interest as a % of Float:2%

No. of funds with stock as Top 10 holding:5

Avg. portfolio weight when stock ranks among Top 10 holdings:5%

Recentnews:Verizon is buying AOL for $4.4 billion, or $50 per share.

Source:Goldman Sachs

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IBM

23 stocks hedge funds are shorting like crazy (22)

Ticker:IBM

Sub-sector:IT Consulting & Other Services

Value of short interest:$4.3 billion

Short interest as a % of Float:3%

No. of funds with stock as Top 10 holding:5

Avg. portfolio weight when stock ranks among Top 10 holdings:9%

Recentnews:IBM is investing $3 billion in the 'Internet of Things' over the next four years.

Source:Goldman Sachs

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Walt Disney

23 stocks hedge funds are shorting like crazy (23)

Ticker:DIS

Sub-sector:IT Consulting & Other Services

Value of short interest:$4.5 billion

Short interest as a % of Float:3%

No. of funds with stock as Top 10 holding:9

Avg. portfolio weight when stock ranks among Top 10 holdings:4%

Recentnews:Disney's stock jumped to an all-time high May 5 after the company reported a beat on earnings and revenues in the second quarter.

Source:Goldman Sachs

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AT&T

23 stocks hedge funds are shorting like crazy (24)

Ticker:T

Sub-sector:Integrated Telecommunication Services

Value of short interest:$11.1 billion

Short interest as a % of Float:6%

No. of funds with stock as Top 10 holding:3

Avg. portfolio weight when stock ranks among Top 10 holdings:6%

Recentnews: Amerger between AT&T and DirecTV is still in the works, waiting for regulatory approval.

Source:Goldman Sachs

23 stocks hedge funds are shorting like crazy (2024)

AbbVie

salesforce.com

Merck

Regeneron Pharmaceuticals

United Technologies

Chevron

Comcast

Twenty-First Century Fox

Halliburton

Boeing

General Electric

Exelon

Caterpillar

Deere & Co

Johnson & Johnson

Pfizer

Exxon Mobil

Kinder Morgan

Intel

Verizon

IBM

Walt Disney

AT&T

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