Aditya Bhave, BofA Securities head of US Economics, joined ‘Power Lunch’ on CNBC on April 17 to talk about whether tariffs are ultimately inflationary, disinflationary, or deflationary. Aditya Bhave responded that the impact depends on the magnitude of the uncertainty shock. He explained that tariffs are generally stagflationary, which means that they contribute to both inflation and economic stagnation. However, he also emphasized that it’s not just the content of the trade policy announcements that matters, but also the disruptive way in which these policies have been communicated, which has increased uncertainty for businesses. He noted that there is a scenario where the uncertainty caused by these policies could outweigh their stagflationary effects, making tariffs disinflationary instead. Bhave also referenced Fed Chair Jerome Powell’s recent hawkish remarks and drew a parallel to Powell’s stance during the 2021–2022 rate hiking cycle.
He highlighted Powell’s assertion that sustained full employment is not possible without price stability, which is a justification that Powell previously used for aggressive rate hikes even during a technical recession. Bhave believes the Fed is likely to maintain its focus on price stability and continue its current policy approach in the near term. Earlier during the COVID-19 pandemic, the Fed and Powell in particular, notably responded to tariff-induced supply chain disruptions by aggressively stimulating the economy. Bhave argued that this aggressive response came after and not during the initial supply chain disruptions, and that while the Fed may have acted a bit late, it ultimately raised rates sharply by 425 basis points in a single year. He does not expect the Fed to repeat such aggression, but believes that the case for holding rates steady is strong right now.
A senior executive looking up at a large boardroom filled with the stocks their company manages.
Our Methodology
We first sifted through stock screeners to find companies with a short interest between 10% and 25%. We then selected the 10 stocks that were the most shorted as of April 16, but at the same time were popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database, which tracks the moves of over 1000 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best High Short Interest Stocks to Buy Now
10. Brinker International Inc. (NYSE:EAT)
Short % of Float As of April 16: 15.45%
Number of Hedge Fund Holders: 51
Brinker International Inc. (NYSE:EAT) owns, develops, operates, and franchises casual dining restaurants in the US and internationally. It operates and franchises Chili’s Grill & Bar and Maggiano’s Little Italy restaurant brands. It also operates virtual brands, like It’s Just Wings.
In FQ2 2025, the Chili’s brand saw a 31.4% year-over-year increase in same-restaurant sales. This growth was well-balanced and attracted a new generation of guests while seeing existing guests visit more frequently. This momentum indicates the success of the investments made over the past 3 years in marketing, operational simplification, labor, and facility improvements. Notably, Chili’s has become the number one casual dining chain in the industry for 2024, according to Circana Crest traffic share data.
This performance comes from improvements like the removal of 13 menu items and 12 pantry SKUs year-to-date to focus on doing fewer things. Food quality has also been upgraded. Marketing efforts are driving traffic and guest counts, especially among younger demographics. For instance, the Triple Dipper social media campaign now represents 14% of total Chili’s sales in Q2, which is a 3-point increase from Q1. Such moves demonstrate Brinker International Inc.’s (NYSE:EAT) growing position in the market.
9. PENN Entertainment Inc. (NASDAQ:PENN)
Short % of Float As of April 16: 13.85%
Number of Hedge Fund Holders: 51
PENN Entertainment Inc. (NASDAQ:PENN) provides integrated entertainment, sports content, and casino gaming experiences. It operates through five segments: Northeast, South, West, Midwest, and Interactive. It has a portfolio of casinos, racetracks, and online sports betting in various jurisdictions.
The company’s Interactive segment reported a revenue of $142 million in Q4 2024. The Interactive division is specifically centered around its ESPN BET online sports betting platform and its expanding Hollywood iCasino products. ESPN BET utilizes a strong brand partnership with ESPN and a fully owned technology stack.
PENN Entertainment Inc.’s (NASDAQ:PENN) omnichannel strategy views the digital space as an opportunity for database growth by attracting younger demographic. Since this focus, the company’s digital database has grown to 4 million new members, with ~34% of these members living within 50 miles of a PENN property. PENN anticipates approaching break-even in 2025, with each quarter delivering a lower loss sequentially, concluding in the first profitable quarter in Q4 2025 since the launch of ESPN BET.
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