The Standard & Poor's 500 index is the most commonly referred to index for determining the performance of the U.S stock market. The stocks on the index are carefully chosen and often serve as representatives of their respected industries. When stocks on the S&P 500 increase or decrease in value, it is more likely that their industry will follow suit.
Many analysts pay close attention to the S&P, and for that reason, we chose to list the stocks on the index that have been experiencing an increase in short-selling over the past month -- a bearish indicator that short-sellers think the stock values will drop.
Want more information on these terms? You got it:
The Standard & Poor's 500 Index (S&P 500) refers to 500 companies that have common stock traded in the U.S. stock market. They are all large-cap companies that serve as representatives of their industries in the U.S. economy. It is one of the most commonly used benchmarks for the health of the stock market. Standard & Poor's committee of analysts and economists has carefully chosen each stock on this list.
Short-selling is an investment technique that allows an investor to make money when the value of a stock falls. Short-sellers, however, lose money when the share price rises. And because share prices could rise to infinity, a reckless short position could lead to incredibly large losses. Because short-selling requires borrowing, an individual or institution must meet several requirements (including background checks) to engage in short-selling. Thus, short-sellers are seen as more sophisticated than the average investor.
In general: When there is an INCREASE in short-selling, short-sellers seem to think the names will DROP in value. When there is an DECREASE in short-selling, short-sellers seem to think the names will RISE in value.
Without further ado, a list of S&P 500 companies with the greatest increase in short-selling. Short-sellers think these stocks are in trouble, do you agree?
List sorted by percent of change in short-seller activity. (Click here to access free, interactive tools to analyze these ideas.)
1. Cerner Corporation
2. J. C. Penney
3. Advanced Micro Devices
4. Best Buy
6. MEMC Electronic Materials
8. Quest Diagnostics
10. Tyson Foods
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Disclosure: Kapitall's Becca Lipman does not own any of the shares mentioned above.