Shorts Are Piling In, Should You Be Worried? – Citigroup Inc. (C), Exxon Mobil Corporation (XOM), Oracle Corporation (ORCL), Chevron Corporation (CVX)

Page 1 of 2

Short-selling sentiment is often an underused and under-appreciated metric in the financial world. Reported twice a month, investors that follow this activity typically focus on the percentage of a stock’s overall float that is shorted—which is always useful—but bimonthly growth rates are also important to track. In the spirit of Insider Monkey’s “Terrible 20″ list compile last year, let’s take a look at some mega-cap companies with the biggest increases in short-selling activity of late. Each stock listed here experienced a double-digit percentage surge in short interest in mid-January, and sports a market capitalization in excess of $100 billion.

Citigroup Inc. (NYSE:C)

Citigroup Inc (NYSE:C)

On January 15th, the last FINRA short sale reporting date, Citigroup had a short interest of 33.9 million shares, good for a 29.4% increase from December 31st. The company issued its fourth quarter earnings just two days after the end of this filing period, whiffing on Wall Street’s estimates. On the heels of settlement costs related to its foreclosure business post-housing crash, Citi reported adjusted EPS of 69 cents, far lower than analysts’ 97-cent consensus.

In the time since, shares of the bank have traded slightly in the red, but overall declines have been minimal. Greater exposure to emerging markets gives Citigroup an obvious growth advantage over its peers, and shares still trade close to 8 times forward earnings. David Tepper and his hedge fund Appaloosa Management are one of Citigroup’s biggest supporters (see David Tepper’s favorite stock picks). We’d have to side with Tepper here, and it’s not advisable for investors to let Citigroup’s increased short interest deter them in this case.

Exxon Mobil Corporation (NYSE:XOM)

Exxon, meanwhile, has recently made headlines for passing Apple in terms of market cap, but the energy behemoth actually saw a much larger increase in short interest in the latest two-week period. Between December 31st and January 15th, the number of Exxon shares held by short sellers increased by 12.5%, while Apple’s short interest remained essentially flat. Exxon reports its Q4 earnings at the end of this week, and Wall Street is expecting EPS of $2.01 on the back of $126 billion in revenues. These figures represent year-over-year growth of 2.0% and 3.3% respectively. If the company can beat, there is room to run; shares currently trade at a 6% discount to their industry’s average.

Most analysts expect Exxon to reach these estimates, as the Brent WTI Spread was favorable in the fourth quarter. We’ll be watching this date closely, but it does appear that there are more short sellers betting on a disappointment.

What mega-caps remain?

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!