15 stocks with big changes in short interest: Renewables, uranium and healthcare

Active investors can gain invaluable insights from short selling data. By taking a short position, traders are betting against the stock because they have identified a major risk that could send the share price much lower.

Short interest reflects the number of shares that have been sold short divided by the total number of shares outstanding. A short interest of more than 10% is generally viewed as high.

Short interest is often used as a gauge for market sentiment towards the stock. A high level of short interest would indicate institutions are betting against the stock, which is generally a bearish signal.

Stocks that have experienced a big jump in short interest (from <1.0%) in November

Data: 3 - 28 November 2022

Interesting observations

Sector trends: Renewables, uranium and healthcare

The rise in short interest is quite apparent for stocks across three sectors:

• Renewables: Calix (decarbonisation technologies), Sandfire (copper) and Mincor (nickel)

• Uranium: Laramide Resources, Peninsula Energy and Boss Energy

• Healthcare: Integral Diagnostics, Incannex Healthcare, Mayne Pharma, Invocare and Blackmores

Healthcare was on a massive winning streak

The S&P/ASX 200 Healthcare Index was on a nine-day winning streak, up 3.8% between 16 to 29 November. Its rally from mid-late October lows was even greater, up more than 10%.

XHJ chart (Source: TradingView)

Uranium price ease

Uranium spot prices fell below the symbolic US$50/lb level last Friday, close to a two month low.

Uranium spot price (Source: TradingEconomics)

Corporate actions

Several of the rising short candidates raised capital in the past month, including:

• 4 Dec: Incannex Healthcare raised $13m at a 10.9% discount

• 27 Nov: Peninsula Energy raised $32m at a 15.5% discount

• 21 Nov: Sandfire Resources raised $94.0m at a 10.2% discount

Mayne Pharma also experienced a rise in short interest in the lead up to its special dividend and capital return (combined payout of 6.52 cents or a yield of 23.7%). Long story short, Mayne Pharma sold one of its businesses for US$475m, with proceeds going towards debt repayment and a return to shareholders.