What Is Shorting Stocks?
Shorting stocks, also known as short selling, is a process where investors sell borrowed shares in hopes of repurchasing them at a lower price so they can return the shares to the lender and pocket the difference. For example, let’s say an investor believes XYZ stock will go down in value. The investor borrows 100 shares of XYZ from a broker and immediately sells it. The investor is now “short” 100 shares of XYZ. Later, when the stock price drops, the investor buys back the same number of shares and returns them to the broker. If the stock price falls by $1 per share, the investor’s profit would be $100.
Shorting stocks can be a risky proposition since there is no limit to how high the stock price can go. So, if the stock price increases instead of decreases, the investor would have to buy back the shares at a higher price and would incur a loss.
What Is A Short Squeeze?
A short squeeze is when a stock or other security that has been heavily shorted rises sharply, causing pain for the shorts who must buy to close their positions. A short squeeze can happen for various reasons, but the most common is simply that the market is going up and the shorts are forced to buy to avoid even greater losses.
Sometimes a company will issue a positive earnings report. Or some other good news will come out, leading to a short squeeze as the shorts cover their positions. Other times, there may be no news at all. However, the market may just start moving up and the shorts are forced to buy. There are many different strategies that investors use to try to profit from short squeezes. Below is a list of the most shorted stocks as of September 12, 2022, by ShortSqueeze.com.
Some will look for stocks that have been heavily shorted and are starting to move up. While others will try to identify companies that are about to issue positive news. Either way, short squeezes can provide opportunities for profits if you know what you’re doing. With that, here are four of the most shorted stocks in the stock market today to watch right now.
Most Shorted Stocks To Watch Right Now
1. Continental Resources Inc. (CLR)
Kicking off the list today, Contential Resources Inc. (CLR) is an oil and gas exploration and production company. In fact, the company is the largest leaseholder and the largest producer in the U.S. premier oil field, the Bakken play of North Dakota and Montana. According to data provided by ShortSqueeze.com, as of September 12, 2022, CLR stock is the #1 most shorted stock among investors. The numbers break down as followed:
- Current Short Interest: 142.67%
- Previous Short Interest: 125.42%
- Short Interest Change: 333,627
- Short Interest % Change: -13.75
- Days To Cover: 1.7
- Shares Short Value: 196.58 million
- Average Daily Volume: 1.58 million
- Market Cap: 25.85 billion
Continental Resources (CLR) Stock News
In July, Continental Resources (CLR) announced its second quarter 2022 results. In the report, the company reported Q2 2022 earnings of $3.47 per share, along with revenue of $2.7 billion. The consensus earnings estimate was $3.17 per share on revenue of $2.6 billion. Additionally, the company reported an increase of 114.6% in revenue, during the same period in 2021.
What’s more, in the same report, CLR also announced that its Board of Directors has declared a quarterly dividend of $0.28 per share. Meanwhile, CLR updated certain metrics for its 2022 outlook. Specifically, the company said it is estimating the 2022 return on capital employed to increase to approximately 32%, compared to the previously announced 31%.
Continental Resources Stock Chart
Year-to-date shares of CLR stock have advanced more than 53% so far in 2022. During Thursday’s afternoon trading session CLR stock is trading at $70.76 per share. All in all, will you be watching CLR stock for a potential short or short squeeze opportunity?
[Read More] Cheap Stocks To Buy Now? 3 Marijuana Stocks To Watch
2. Bed Bath & Beyond Inc. (BBBY)
Next, Bed Bath & Beyond Inc. (BBBY) is an American retailer that sells bedding, bath items, and other home goods. For a sense of scale, the company operates more than 1,000 stores across the country and employs over 40,000 people. Notably, Bed Bath & Beyond’s product selection includes items from a wide range of brands, including popular names such as Martha Stewart and Wamsutta.
As of September 12, 2022 data provided from ShortSqueeze.com has BBBY stock as the #2 most shorted stock in the stock market. Let’s dive into the numbers below:
- Current Short Interest: 108.36%
- Previous Short Interest: 107.87%
- Short Interest Change: 140,208
- Short Interest % Change: -0.46%
- Days To Cover: 0.7
- Shares Short Value: 269.00 million
- Average Daily Volume: 44.77 million
- Market Cap: 702.43 million
Bed Bath & Beyond (BBBY) Stock News
At the end of August, Bed Bath & Beyond announced strategic updates in an effort to improve its financials, increase growth, and “better serve customers”. In the release, the company announced that they have secured new financing commitments in the amount of more than $500 million. From a cost structure standpoint, BBBY reported its estimates to reduce its SG&A by nearly $250 million in 2022.
Sue Gove, Director & Interim Chief Executive Officer commented, “We are embracing a straight-forward, back-to-basics philosophy that focuses on better serving our customers, driving growth, and delivering business returns. In a short period of time, we have made significant changes and instituted enablers across our entire enterprise to regain our dominance as a preferred shopping destination for our customers’ favorite brands and exciting products. We command a special presence in the Home and Baby markets, and we intend to fulfill our opportunity to be the category retailer of choice.“
BBBY Stock Chart
After being down over 57% shares in the last month of trading, shares of BBBY stock have rallied back over 5% as of Thursday’s power hour session. Bed Bath & Beyond stock is currently trading at $8.70 per share. Given the recent trading volatility around BBBY stock so far in 2022, do you think it deserves a spot on your watchlist right now?
3. CompoSecure Inc. (CMPO)
CompoSecure, Inc. (CMPO) is a provider of innovative security solutions. From physical security products to software solutions, CompoSecure offers a comprehensive array of products and services to meet the needs of businesses and organizations of all sizes. CompoSecure’s products are designed to protect critical infrastructure and data and to provide a safe and secure environment for employees, customers, and visitors.
Data provided by ShortSqueeze.com, as of September 12, 2022, CMPO stock is the #3 most shorted stock in the stock market today. Check out the numbers below:
Current Short Interest: 91.76%
Previous Short Interest: 89.08%
Short Interest Change: 47,045
Short Interest % Change: -3.01%
Days To Cover: 13.1
Shares Short Value: 8.48 million
Average Daily Volume: 112.78k
Market Cap: 79.67 million
CompoSecure (CMPO) Stock News
On August 4, 2022, the company announced record second quarter 2022 financial results. In fact, CompoSecure also raised its guidance. Let’s dive in, the company posted a loss of $0.32 per share and revenue of $97.2 million. This is compared with the street’s consensus estimates for the quarter which was $0.12 per share, and revenue of $86.7 million.
Meanwhile, the company did announce that it estimates full-year 2022 revenue to come in between $355.0 million to $380.0 million. This most recent outlook is higher than the previously announced, which was revenue for the 2022 fiscal year between $336.0 million to $376.0 million.
Jon Wilk, CompoSecure’s President, and CEO stated in his letter to shareholders, “We have delivered exceptional results through the first half of the year while navigating a dynamic environment. Given our performance and continued confidence in the strength of our sales pipeline, we are raising our 2022 full fiscal year guidance.”
CMPO Stock Chart
Continuing on, so far in 2022 shares of CMPO stock have been beaten down by over 38% as of Thursday’s close at $5.10 per share. Considering all this information could now be a time to keep CompoSecure stock on your list of stocks to watch?
[Read More] 3 Meme Stocks To Watch Today
4. Warby Parker Inc. (WRBY)
Last but not least, Warby Parker Inc. (WRBY) is an American eyewear company founded in 2010. The company sells prescription glasses, sunglasses, and contact lenses online and in Warby Parker stores. In addition, Warby Parker’s “buy a pair, give a pair” program has donated more than 10 million pairs of glasses to people in need around the world. In addition, the company is widely considered to be one of the most innovative and successful direct-to-consumer brands in the world.
Continuing forward, as of 9/12/2022 data provided by ShortSqueeze.com has WRBY stock coming in at number 4 on the list of most shorted stocks in the stock market.
Current Short Interest: 72.89%
Previous Short Interest: 65.53%
Short Interest Change: 1,779,960
Short Interest % Change: -11.23%
Days To Cover: 10.3
Shares Short Value: 250.70 million
Average Daily Volume: 1.72 million
Market Cap: 1.64 billion
Warby Parker (WRBY) Stock News
In recent news, Warby Parker released its second quarter 2022 financial results last month. Getting straight to it, the company reported better-than-expected figures, however, they revised their guidance lower. In detail, WRBY reported a loss of $0.02 per share, with revenue of $149.6 million for Q2 2022. This is versus Wall Street analysts’ estimates which were a loss of $0.02 per share, and revenue of $148.8 million.
Furthermore, the company reported it now estimates the full year 2022 revenue of $584 million to $595.0 million. These recent estimates come in lower than what Warby Parker announced previously which were revenue estimates for 2022 of $650.0 million to $660.0 million. Additionally, the company announced an increase in active customers by 8.7% to 2.26 million on a year-over-year basis.
Co-Founder & CEO Dave Gilboa said this in his press release, “We offer products and services people need to see, and believe we offer unparalleled value and a superior customer experience that well position us over the long term. Our team remains focused on sustainable growth, expanding profitability, and providing vision for all.“
WRBY Stock Chart
As of Thursday’s closing bell, shares of Warby Parker stock are currently trading at $14.26 per share. This comes after the company’s share price has been beaten down by over 68% since the start of this year. With WRBY stock trading -76.35% from its 52-week highs, is now a good time to be keeping tabs on WRBY stock right now?