The most recent short interest data has just been released for the 01/15/2019 settlement date, and we here at Dividend Channel have sifted through this fresh data and screened out these five S&P 500 stocks. A metric we find particularly useful when comparing short interest data is the “days to cover” metric because it considers both the total shares short and the average daily volume of shares traded. For the five stocks below, we have detected a notable change in days to cover, not just from the prior reporting period but also going back a full month. The table below summarizes what we found, with the five columns showing data for each of the five stocks, and the rows showing the days to cover values first from the 12/14/2018 reporting period, then the most recent 01/15/2019 reporting period, followed by the change and percentage change:
| ROL | UAA | CHRW | MAC | UA | |
|---|---|---|---|---|---|
| 12/14/2018 | 7.97 | 3.67 | 7.34 | 4.13 | 2.64 |
| 01/15/2019 | 13.47 | 8.88 | 11.20 | 7.87 | 5.97 |
| Change | 5.50 | 5.21 | 3.86 | 3.75 | 3.33 |
| % Change | 69.00% | 141.81% | 52.58% | 90.83% | 126.25% |
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At Rollins, Inc. (NYSE: ROL), average daily volume at the 01/15/2019 settlement saw a decrease to 980,042, as compared to 1,632,896 at the 12/14/2018 report. That brought days to cover up to 13.47, a 69.00% increase from the 7.97 days to cover calculated at the 12/14/2018 settlement date. Looking at total shares short, there was a 186,123 share increase to 13,197,264.0, a rise of 1.43% since 12/14/2018. The below chart shows the historical days to cover for ROL at previous short interest release dates:
Meanwhile at Under Armour Inc (NYSE: UAA), average daily volume at the 01/15/2019 settlement moved lower to 3,933,907, as compared to 8,618,377 at the 12/14/2018 report. That brought days to cover up to 8.88, a 141.81% increase from the 3.67 days to cover calculated at the 12/14/2018 settlement date. Looking at total shares short, there was a 3,282,830 share increase to 34,918,723, an increase of 10.38% since 12/14/2018. The chart below shows the historical days to cover for UAA at previous short interest release dates:
Over at C.H. Robinson Worldwide, Inc. (NASD: CHRW), average daily volume at the 01/15/2019 settlement decreased to 1,031,921, as compared to 1,480,739 at the 12/14/2018 report. The resulting days to cover value was up to 11.20, a 52.58% increase from the 7.34 days to cover calculated at the 12/14/2018 settlement date. Looking at the running total of all outstanding shorted shares, there was a 688,050 share increase to 11,555,683, a 6.33% increase since 12/14/2018. The below chart plots the historical days to cover for CHRW at prior short interest release dates over time:
At Macerich Co (NYSE: MAC), average daily volume at the 01/15/2019 settlement declined to 1,101,188, as compared to 1,838,876 at the 12/14/2018 report. The days to cover calculation moved up to 7.87, a 90.83% increase from the 4.13 days to cover calculated at the 12/14/2018 settlement date. Looking at the total of all open short positions, there was a 1,083,236 share increase to 8,671,728, a 14.27% rise since 12/14/2018. The chart below shows the days to cover over time for MAC at previous short interest release dates:
And at Under Armour Inc (NYSE: UA), average daily volume at the 01/15/2019 settlement decreased to 2,097,812, as compared to 4,722,618 at the 12/14/2018 report. That brought days to cover up to 5.97, a 126.25% increase from the 2.64 days to cover calculated at the 12/14/2018 settlement date. Looking at total shares short, there was a 62,265 share increase to 12,531,220, an increase of 0.50% since 12/14/2018. The following chart plots the historical days to cover for UA at previous short interest release dates over time:
An increased “days to cover” value could indicate that short sellers are using these stocks to hedge long bets elsewhere, or could also mean that short sellers believe the stocks will decline in price. When short sellers eventually cover their positions, by definition there must be buying activity because a share that is currently sold short must be purchased to be covered. So investors tend to keep an eye on that days to cover metric, because a high value could predict a sharper price increase should a company put out some unexpectedly good news — short sellers might then rush to cover their positions, and if the days to cover number is high, it would then be more difficult to close those positions without sending a stock higher (until the higher price produces enough sellers to generate the necessary volume the short sellers need to close their positions).
In afternoon trading Tuesday, ROL was up about 0.2% on the day, UAA was off about 2.3%, CHRW was down about 0.3%, MAC was up about 0.2%, and UA was off about 2.4%.
