Consumer durables currently most shorted: S&P Global

Consumer durables are now the largest category of shorted stocks, a recent S&P Global Market Intelligence report found it.

Consumer durables sell goods and services that are considered non-essential, such as clothing and vehicles, the report said. The largest consumer durables companies, such as Amazon.com Inc. (AMZN), Tesla Inc. (TSLA), The Home Depot Inc. (HD) and Nike Inc. (NKE) exceeded expectations and performed exceptionally well during the coronavirus pandemic after consumer spending was largely redirected to retail.

Meme stocks such as GameStop (GME) and AMC (AMC) have been subject to short squeezes with stock prices rising sharply in a short period of time. In those cases, the short squeezes were driven by a frenzy of stock purchases to drive up stock prices and the subsequent cover of shorts. Retail investors have been integral to this push, as much of the activity can be traced back to social media groups such as Reddit’s r/WallStreetBets.

Many of these meme stocks are consumer durables. Companies such as the aforementioned GameStop and AMC, as well as electronics giant Best Buy (BBY), have suffered major short squeezes in the past year. Some pundits have even called for meme stocks to be labeled as their own distinct asset class.

The recent surge in short betting comes as government stimulus has largely ended, expanded unemployment benefits are nearing an end, and concerns about the spread of the Delta strain of coronavirus have weighed on consumer confidence, the report said.

Consumer durables have partially suffered from the end of unemployment benefits in most states, and national benefits are set to expire later this month. Rising inflation also threatens eat in consumer incomes.

For the S&P 500 (^GSPC), Big 5 led Sporting Goods Corp. (BGFV) the pack of companies with a large short position, with Workhouse Group Inc. (WKHS), Beam Global (BEEM), Esperion Therapeutics Inc. (ESPR), and Blink Charging Co. (BLNK) closes the list for the top 5 companies with the most shorts as of mid-August 2021, according to the data. BGFV, a sporting goods retailer, held more than 35% of its outstanding shares in the hands of short sellers, the largest share of all stocks on a major exchange.

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Short sellers, who on average represent just 2.2% of shares in the S&P 500, have 4.6% of outstanding consumer discretionary shares, the highest of any sector.

After consumer discretionary, the stocks with the most short positions were healthcare (4.5% short sellers), information technology (3.5%), consumer staples (3.4%), communications services (3.2%), and energy (3.2 %).

Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.

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