Short Interest is Tapering Off in These 5 Nasdaq Stocks

Short interest usually gives investors a sense of how pessimistic or bearish market participants are toward a particular company’s stock. Short interest represents the number of shares of a particular stock that bearish traders and investors have sold short but not yet covered. Hence, if the overall short interest of a stock declines, it means that some traders who previously shorted the stock have covered their short positions.

Generally, there are two primary reasons short sellers may want to cover their short positions. First, short sellers may seek to limit losses amid a stock price rally. And second, they may want to lock in profits amid a massive drop in a stock’s share price. Either way, the level of short interest on individual equities represents a very efficient and accurate method for measuring investor sentiment. As a result, if the short interest of a stock declines meaningfully, the motives behind short sellers’ decision to short in the first place may be cooling off. That said, the following article will lay out a list of five Nasdaq stocks that saw their short interest decline massively in the second half of June.

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#5. LivaNova PLC (NASDAQ:LIVN)

– Change in short interest in the period of June 15-June 30: -53.8%

– Investors with long positions as of March 31: 23

– Aggregate value of investors’ holdings as of March 31: $481.68 Million

The most recent short interest data show a 1.13 million share-decrease in total short interest for LivaNova PLC (NASDAQ:LIVN) in the second half of June to 967,445 shares. There were 23 hedge fund vehicles followed by Insider Monkey with long positions in LivaNova at the end of March, up from 20 registered at the end of the four quarter of 2015. Nonetheless, the overall value of those positions fell by 23% quarter-over-quarter to $481.68 million, partially due to a 9% decline in the value of LivaNova shares. The global medial device company headquartered in London has seen its market value plunge by 14% thus far in 2016. A blind guess would be that the short interest declined as worries related to the uncertainty and consequences that may flow from the Brexit vote are diminishing. The medial technology and innovation company recorded worldwide sales of $287 million for the first quarter of 2016, up 3.0% year-over-year on a constant currency basis. Ken Fisher’s Fisher Asset Management owns 52,000 shares of LivaNova PLC (NASDAQ:LIVN) as of June 30.

#4. Monster Beverage Corporation (NASDAQ:MNST)

– Change in short interest in the period of June 15-June 30: -57.6%

– Investors with long positions as of March 31: 31

– Aggregate value of investors’ holdings as of March 31: $1.02 Billion

Short interest for Monster Beverage Corporation (NASDAQ:MNST) declined by 5.72 million shares during the two-week period ending June 30 to 4.21 million shares. The number of asset managers from our system with stakes in Monster Beverage remained unchanged at 31 during the first quarter, whereas the aggregate value of those stakes rose by 20% quarter-over-quarter to $1.02 billion. The energy drink company has seen the value of its stock jump by 7% so far in 2016. Earlier this month, analysts at Wells Fargo downgraded Monster Beverage to ‘Market Perform’ from ‘Outperform’ in anticipation of a weak second-quarter earnings report. Precisely, Wells Fargo analysts say near-term upside potential is limited because of soft second-quarter U.S. results based on survey that suggest 4.3% of dollar sales growth for Monster in the U.S. convenience-store channel, delays in launching new innovation, as well as ongoing macroeconomic challenges in international markets caused by the so-called Brexit and a slowing Chinese economy. Stephen Mandel’s Lone Pine Capital acquired a new stake of 1.11 million shares of Monster Beverage Corporation (NASDAQ:MNST) during the first quarter.

#3. Euronet Worldwide Inc. (NASDAQ:EEFT)

– Change in short interest in the period of June 15-June 30: -57.6%

– Investors with long positions as of March 31: 17

– Aggregate value of investors’ holdings as of March 31: $184.22 Million

Up-to-date short interest data reveals a 1.09 million share-decrease in short interest for Euronet Worldwide Inc. (NASDAQ:EEFT) to 802,028 shares, with the company’s short interest as a percentage of its float standing at only 1.6% at the end of June. Euronet fell out of favor with the money managers followed by Insider Monkey during the first quarter of 2016, as the number of managers invested in the company dropped to 17 from 30 quarter-over-quarter. Similarly, the overall value of those managers’ equity investments in the company decreased by 16% quarter-on-quarter to $184.22 million. The electronic payments provider has seen its shares gain 11% in the past 52 weeks. The company’s EFT Processing segment, which processes transactions for a network of nearly 25,000 ATMs and roughly 129,000 POS terminals across Europe, the Middle East and Asia Pacific, represents Euronet’s smallest (20% of overall revenues) but most profitable segment. Revenues in this segment grew 16% year-over-year in the first quarter to $86.57 million. Phil Frohlich’s Prescott Group Capital Management has 20,064 shares of Euronet Worldwide Inc. (NASDAQ:EEFT) among its holdings as of the end of June.

#2. Elizabeth Arden Inc. (NASDAQ:RDEN)

– Change in short interest in the period of June 15-June 30: -59.2%

– Investors with long positions as of March 31: 9

– Aggregate value of investors’ holdings as of March 31: $16.30 Million

The number of Elizabeth Arden Inc. (NASDAQ:RDEN) shares short decreased by 2.59 million in the second half of June to 1.79 million. Even so, the company’s short interest as a percentage of its float stands at a worrying 8.2% as of June 30. A total of nine hedge fund vehicles from our database were invested in Elizabeth Arden at the end of March, as compared to seven recorded at the end of December. Despite the increase in hedge fund sentiment, the aggregate value of those funds’ equity investments in the company fell to $16.30 million from $20.05 million quarter-on-quarter. In mid-June, Revlon Inc. (NYSE:REV) agreed to buy cosmetics competitor Elizabeth Arden for $14.00 per share in cash, a deal that will expand the acquirer’s presence in categories such as skin care and perfume. Elizabeth Arden sells perfumes and cosmetics under its owns brand, as well as makes fragrances for celebrity trademarks such as Justin Bieber and Taylor Swift. The deal will create a company with combined annual sales of approximately $3 billion, as well as enable Revlon to refinance its debt load. Royce & Associates, founded by Chuck Royce, was the owner of 1.24 million shares of Elizabeth Arden Inc. (NASDAQ:RDEN) at the end of March.

#1. Pan American Silver Corp. (USA) (NASDAQ:PAAS)

– Change in short interest in the period of June 15-June 30: -70.4%

– Investors with long positions as of March 31: 12

– Aggregate value of investors’ holdings as of March 31: $114.48 Million

Last but certainly not least, Pan American Silver Corp. (USA) (NASDAQ:PAAS)’s short interest dropped a massive 70% in the second half of June to 1.89 million shares. The number of asset managers followed by our team with long positions in Pan American Silver climbed to 12 from 10 during the first quarter, while the overall value of those positions jumped to $114.48 million from $52.05 million quarter-over-quarter. The 12 money managers hoarded up nearly 7% of the company’s total number of outstanding shares. The silver producer that owns and operates seven mines in Mexico, Peru, Argentina and Bolivia has seen the value of its stock skyrocket by 179% since the start of the year, thanks to the strong recovery in metal prices. The company’s first-quarter revenue dropped 11% year-on-year to $158.28 million, mainly due to lower metal prices and lower quantities of medals sold. Even so, Pan American Silver generated $1.9 million in net earnings, as compared to a loss of $19.8 million posted a year ago. Jim Simons’ Renaissance Technologies had a whopping 7.14 million shares of Pan American Silver Corp. (USA) (NASDAQ:PAAS) in its portfolio on March 31.

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