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15 Most Shorted Stocks That Are Loved By Analysts

In this piece, we will take a look at the 15 most shorted stocks that are loved by analysts. If you want to skip our introduction to short selling, then jump ahead to 5 Most Shorted Stocks That Are Loved By Analysts.

Short selling is a tricky game. Rapid share price appreciations can stretch a short seller’s budget to the limit and lead to losses that are twice, thrice, or even more higher than the initial investment.

To understand this consider a simple example. Imagine you go short on the shares of Firm A. The stock is currently trading for $10, and you borrow shares at this price and sell them on the market in hopes that the price will fall. Ten shares sold short will be worth $100. However, the firm announces a breakthrough technology and the shares soar to $30. Now, you have to spend $300 to buy back the ten shares and return all of these to book a loss that is three times the original borrowed amount. On the flip side, if you had bought the ten shares with the hope that the share price would appreciate but the shares tanked to $0, then you’d have lost $100 only.

Yet, despite this, shorting stocks is still an important part of the U.S. market. In fact, shorting has helped discover some massive frauds recently. One of the biggest examples is the story of Nikola Corporation (NASDAQ:NKLA). While its shares currently trade for $1.31, they were actually soaring to high levels around $66 in 2020. So, what happened? Well, short seller Hindenburg Research released a report in September 2020 which accused Nikola of manipulating its vehicle tests and engaging in investor fraud. The firm’s shares, which were trading at around $34, tanked and have been unable to recover since then. The report also made Nikola’s founder and chief executive officer Trevor Milton resign, and the firm has never been the same.

Hindenburg was back earlier this year when it targeted one of India’s biggest business groups, the Adani Group. It alleged improper financial practices at the firm, and Adani along with associated companies ended up losing $104 billion in market value. The report also knocked down the group’s founder Mr. Gautam Adani several places down the world’s rich list, and Adani’s shares have still to recover despite 2023 nearing its end.

However, as we mentioned above, short selling is a risky endeavor. A short position going wrong, i.e. the share price appreciating instead of falling is called a short squeeze. A short squeeze causes billions of dollars in losses, and we took a look at some notable squeezes in our coverage of 10 Biggest Short Squeezes of All Time. It shows that one of the biggest short squeezes in history is the one that took place in the shares of Volkswagen AG (OTC: VWAGY), which ended up causing hedge funds $30 billion in losses. Other notable short squeezes include the close to $40 billion in losses that short sellers incurred when going against Tesla, Inc. (NASDAQ: TSLA) – whose chief Mr. Elon Musk is known for engaging the short sellers on the social media platform X (formerly Twitter).

Today we’ve decided to take a look at some latest stocks that are on short sellers’ radar but with a twist that compares their positions with Wall Street analysts. As a primer, short interest shares are those that have been sold short on the market, and some top picks in today’s piece are Microvast Holdings, Inc. (NASDAQ:MVST), BioVie Inc. (NASDAQ:BIVI), and Bionano Genomics, Inc. (NASDAQ:BNGO).

Our Methodology

To make our list of the most shorted stocks that are loved by Wall Street analysts, we compiled the list of stocks that had more than 8% of their float shorted, had Strong Buy recommendations from analysts, and have significant share price upside based on the average analyst share price. The stocks with the highest upside are chosen as the most shorted stocks loved by analysts.

Most Shorted Stocks That Are Loved by Analysts

15. INmune Bio, Inc. (NASDAQ:INMB)

Short Interest Percentage: 9.75%

Average Share Price Target: $17.33

Share Price Upside: 119%

INmune Bio, Inc. (NASDAQ:INMB) is a small biotechnology company focusing on developing cancer and tumor treatments. Baird rated its shares as Outperform in June 2023 and the firm narrowed its loss per share in its second quarter.

During Q2 2023, four out of the 910 hedge funds part of Insider Monkey’s database had held a stake in INmune Bio, Inc. (NASDAQ:INMB). Out of these, the firm’s biggest investor is Henrik Rhenman’s Rhenman & Partners Asset Management since it owns 178,284 shares that are worth $1.6 million.

INmune Bio, Inc. (NASDAQ:INMB) joins BioVie Inc. (NASDAQ:BIVI), Microvast Holdings, Inc. (NASDAQ:MVST), and Bionano Genomics, Inc. (NASDAQ:BNGO) in our list of most shorted stocks that are loved by analysts.

14. Ardelyx, Inc. (NASDAQ:ARDX)

Short Interest Percentage: 12.96%

Average Share Price Target: $8.64

Share Price Upside: 119%

Ardelyx, Inc. (NASDAQ:ARDX) focuses on treatments for gastrointestinal system and kidney diseases. Its latest analyst share coverage came from Cantor Fitzgerald which upgraded the share rating to Overweight from Neutral in August 2023.

As of June 2023, 14 out of the 910 hedge funds polled by Insider Monkey had invested in the company. Ardelyx, Inc. (NASDAQ:ARDX)’s largest hedge fund stakeholder is Israel Englander’s Millennium Management through its $23.6 million investment.

13. 89bio, Inc. (NASDAQ:ETNB)

Short Interest Percentage: 11.73%

Average Share Price Target: $37

Share Price Upside: 124%

Another biotechnology company, 89bio, Inc. (NASDAQ:ETNB) makes treatments for liver diseases. Cantor Fitzgerald and RBC Capital kept Overweight and Outperform share ratings for its stock in August 2023 despite the fact that the firm had missed analyst EPS estimates for its second quarter.

Insider Monkey scoured through 910 hedge fund portfolios for their second quarter of 2023 shareholdings and discovered that 39 had bought and invested in 89bio, Inc. (NASDAQ:ETNB)’s shares. Peter Kolchinsky’s RA Capital Management is the company’s biggest shareholder since it owns a $216 million stake.

12. The Lovesac Company (NASDAQ:LOVE)

Short Interest Percentage: 30.85%

Average Share Price Target: $52.67

Share Price Upside: 136%

The Lovesac Company (NASDAQ:LOVE) is a furniture company. A consumer cyclical firm, its performance is quite dependent on consumer spending power. Naturally, the shares have see sawed this year, and are up by a marginal 1.32% year to date.

During 2023’s June quarter, 17 among the 910 hedge funds surveyed by Insider Monkey had held the firm’s shares. The Lovesac Company (NASDAQ:LOVE)’s largest stakeholder among these is Paul Marshall and Ian Wace’s Marshall Wace LLP through its $15.8 million investment.

11. Dyne Therapeutics, Inc. (NASDAQ:DYN)

Short Interest Percentage: 9.44%

Average Share Price Target: $29.50

Share Price Upside: 148%

Dyne Therapeutics, Inc. (NASDAQ:DYN) is an American firm that develops treatments for muscular diseases such as dystrophy. It’s unsurprising that nearly 10% of the firm’s float has been shorted, since its cash burn rate of $178 million per year is quite high when compared to $208 million of cash reserves as of June 2023.

Insider Monkey surveyed 910 hedge funds and discovered 22 Dyne Therapeutics, Inc. (NASDAQ:DYN) investors as of June 2023. Out of these, the biggest shareholder is Ken Griffin’s Citadel Investment Group since it owns 2.7 million shares that are worth $30.4 million.

Microvast Holdings, Inc. (NASDAQ:MVST), Dyne Therapeutics, Inc. (NASDAQ:DYN), BioVie Inc. (NASDAQ:BIVI), and Bionano Genomics, Inc. (NASDAQ:BNGO) are some highly shorted stocks on the analyst radar.

10. Viking Therapeutics, Inc. (NASDAQ:VKTX)

Short Interest Percentage: 14.50%

Average Share Price Target: $33.8

Share Price Upside: 148%

Viking Therapeutics, Inc. (NASDAQ:VKTX) is developing treatments for liver diseases, post surgical complications, and other ailments. Despite a hefty short interest percentage, the firm’s shares are up by nearly 60% year to date and the stock is rated Strong Buy on average.

As of Q2 2023 end, 28 out of the 910 hedge funds polled by Insider Monkey had invested in the company. Viking Therapeutics, Inc. (NASDAQ:VKTX)’s largest hedge fund investor is Andreas Halvorsen’s Viking Global through a stake worth $57.4 million.

9. Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS)

Short Interest Percentage: 15.76%

Average Share Price Target: $45.57

Share Price Upside: 162%

Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS) makes treatments for eye diseases. The firm scored a win in July when the Food and Drug Administration (FDA) approved its treatment for an eyelid disease that is thought to affect 25 million Americans. The stock soared after the announcement and the shares have gained 20% year to date.

Insider Monkey’s second quarter of 2023 survey of 910 hedge funds saw 13 Tarsus Pharmaceuticals, Inc. (NASDAQ:TARS) investors. Albert Cha and Frank Kung’s Vivo Capital is the company’s biggest stakeholder due to its $40.8 million investment.

8. Ebix, Inc. (NASDAQ:EBIX)

Short Interest Percentage: 24.54%

Average Share Price Target: $39.88

Share Price Upside: 162%

Ebix, Inc. (NASDAQ:EBIX) is a software company that provides platforms to insurance, remittance, and other firms in the U.S. to manage customer relationship and run other functions. Its shares tanked in August right around the same time Ebix, Inc. (NASDAQ:EBIX) reported its June quarter earnings that saw a hefty EPS drop and a miss of analyst revenue growth estimates.

By the end of June 2023, 16 hedge funds out of the 910 polled by Insider Monkey had held the firm’s shares. Out of these, Ebix, Inc. (NASDAQ:EBIX)’s largest investor is D. E. Shaw’s D E Shaw since it owns $17.8 million worth of shares.

7. Aldeyra Therapeutics, Inc. (NASDAQ:ALDX)

Short Interest Percentage: 24.54%

Average Share Price Target: $20.38

Share Price Upside: 169%

Another biotechnology firm, Aldeyra Therapeutics, Inc. (NASDAQ:ALDX) develops treatments for immune system disorders. The firm’s been having a good financial time lately, as it has beaten analyst EPS estimates in all four of its latest quarters.

Insider Monkey scoured through 910 hedge funds for their investors during this year’s second quarter and found 17 Aldeyra Therapeutics, Inc. (NASDAQ:ALDX) investors. Joseph Edelman’s Perceptive Advisors is the biggest stakeholder among these since it owns 11.3 million shares that are worth $95.2 million.

6. Pliant Therapeutics, Inc. (NASDAQ:PLRX)

Short Interest Percentage: 11%

Average Share Price Target: $46.33

Share Price Upside: 185%

Pliant Therapeutics, Inc. (NASDAQ:PLRX) is an American company making treatments for liver diseases. The firm beat analyst EPS estimates for its second quarter, and Cantor Fitzgerald, JP Morgan, Oppenheimer, and RBC Capital maintained Outperform or Overweight ratings for the shares in August 2023.

28 out of the 910 hedge funds part of Insider Monkey’s Q2 2023 database had held a stake in the company. Out of these, the firm’s largest investor is David Kroin’s Deep Track Capital through a stake worth $73.3 million.

Microvast Holdings, Inc. (NASDAQ:MVST), Pliant Therapeutics, Inc. (NASDAQ:PLRX), BioVie Inc. (NASDAQ:BIVI), and Bionano Genomics, Inc. (NASDAQ:BNGO) are most shorted stocks loved by analysts.

Click to continue reading and see 5 Most Shorted Stocks That Are Loved by Analysts.

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Disclosure: None. 15 Most Shorted Stocks That Are Loved by Analysts is originally published on Insider Monkey.

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