Short-Sellers Are Busy Covering Their Bets Against These Stocks

#3 Piedmont Natural Gas Company, Inc. (NYSE:PNY)

– Decrease in short interest in the period between August 31- September 15 : 46.3%

– Hedge Funds With Long Positions (as of June 30): 14

– Value of Hedge Funds’ Holdings (as of June 30): $295.89 Million

With Duke Energy Corp’s acquisition of Piedmont Natural Gas Company, Inc. (NYSE:PNY) on its way towards completion, the short interest in the latter fell drastically to 1.24 million shares from 2.31 million shares. Piedmont Natural Gas Company, Inc. (NYSE:PNY)’s stock has been trading very close to Duke Energy Corp’s purchase price of $60 per share for more than six months now, signaling the strong conviction of market participants on the deal getting completed. Hedge funds tracked by us were equally convinced about the completion of this deal as during the second quarter the ownership of Piedmont among them increased by five and the aggregate value of their holdings in it rose by $13.6 million.

#2 Lockheed Martin Corporation (NYSE:LMT)

– Decrease in short interest in the period between August 31- September 15 : 47.7%

– Hedge Funds With Long Positions (as of June 30): 39

– Value of Hedge Funds’ Holdings (as of June 30): $1.18 Billion

Lockheed Martin Corporation (NYSE:LMT)’s stock lost almost 10% in the second-half of August after it revealed on August 15 that the sale of its IT division to Leidos Holdings would provide less earnings boost to the company than originally anticipated. However, once the stock stabilized following this beating, the short interest in Lockheed Martin Corporation (NYSE:LMT) declined to 3.5 million shares from 6.7 million shares in the next 15 days. The number of hedge funds we track that were long Lockheed Martin increased by only two during the second quarter, but the aggregate value of their holdings in it jumped by 36.67%. The company recently hiked its quarterly dividend by 10% to $1.82 per share, which represents an annual yield of 3.04%, and also authorized additional share repurchase of $2 billion. Last month, analysts at Wells Fargo & Co. upgraded the stock to ‘Outperform’ from ‘neutral’ and also raised their price target on it to $227.50 from $199.01.

#1 Johnson Controls Inc (NYSE:JCI)

– Decrease in short interest in the period between August 31- September 15 : 48.5%

– Hedge Funds With Long Positions (as of June 30): 32

– Value of Hedge Funds’ Holdings (as of June 30): $1.09 Billion

Johnson Controls Inc (NYSE:JCI) saw the largest decrease in short interest during the first-half of September among all the stocks covered in this list. This  short covering frenzy started after the company announced, on August 31, the preliminary results of the elections made by its shareholders in the Tyco International merger. Within a week of that announcement, Johnson Controls Inc (NYSE:JCI) revealed that it has completed its merger with Tyco International, causing a short squeeze in the former’s stock. Though shares of the company have receded since then, they still boast year-to-date gains of 26.41%. Following the completion of Tyco merger, Johnson Controls will be soon spinning off its automotive parts business as a separate publicly traded entity called ‘Adient’. During the second quarter, the company saw a notable increase in its popularity among funds covered by us with its ownership among them increasing by five and the aggregate value of their holdings in it jumping by 68.16%.

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