Short Report: Bearish bets on Revolve Group at six-month highs

Welcome to this week’s installment of “The Short Interest Report” – The Fly’s weekly recap of short interest trends among some of the most widely followed high-short-float stocks. Using the data from our partner Ortex.com, which utilizes the latest information from stock lenders to estimate short interest changes for thousands of publicly traded companies, this report will screen for some of biggest changes in short interest as a percentage of free float and days-to-cover ratios while also considering the short interest data on some of the more volatile and heavier-traded names of the week. Based on the availability of data from Ortex, the report tracks the trading period that covers prior Friday through Thursday of this week, excluding holidays. As a basis of comparison for stocks discussed below, the S&P 500 index was up 0.6%, the Nasdaq Composite was up 1.0%, the Russell 2000 index was down 1.9%, the Russell 2000 Growth ETF (IWO) was down 1.2%, and the Russell 2000 Value ETF (IWN) was down 2.5% in the five-day trading session range through September 26.

SHORT INTEREST GAINERS

• Estimated short interest on Revolve Group (RVLV) had slipped to a four-month low around 21% two weeks ago, tracking the 13% pullback in the stock price from mid-August highs. With shares on the rise again however, bearish bets have resurfaced, pushing the short positioning as a percentage of free float back to match the multi-month highs around 27%. This week, Ortex data saw short interest on Revolve Group rise from 25.1% to 27.3% and days to cover tick up to 6.4 from 6.1. Revolve shares were down about 2% in the five-day period covered, but have gained 22% from September 9th lows. Year-to-date, the stock is up 51%, though the run-up in Revolve Group from its early July lows had reached as much as 75%.
• Ortex-reported short interest on Frontier Group (ULCC) had plateaued around 27% in the first week of September, but is up for the third consecutive week, rising from 29.7% all the way to 35% by Thursday. This marks the highest level in short positioning for Frontier since early February. Despite the increase in trading volume on the name this month, days-to-cover on the stock has also been trending higher, rising some 200 basis points to 12.6 – the highest level since early July. Shares of the discount airline meanwhile, have also been less turbulent – the stock has now risen 70% from its mid-August lows, even though shares are still down about 11% year-to-date. In the five-day period covered, Frontier was up about 13%.
• Estimated short interest in New Fortress Energy (NFE) troughed around 31% about three weeks ago as bears booked profits amid the stock’s 60% slide in the span of the prior seven weeks. Shares staged a relief rally early last week but could not sustain momentum, with another 15% retreat coming over the five-day trading period through Thursday. Bearish positioning meanwhile has seen renewed accumulation, rising from about 34% to a record high of 42%.
• Ortex-reported short interest in Afya Limited (AFYA) spent about a month around 27%, but saw a step higher this week while the stock continues to rebound from multi-month lows from two weeks ago. Shorts position as a percentage of free float rose over eight percentage points to a one-month high of 35.5% and days-to-cover was up 35bps to 1.25. The stock, meanwhile, gained just over 1% in the five-day period through Thursday but has now risen over 7% over a two-week span.

SHORT INTEREST DECLINERS

• Estimated short interest on Children’s Place (PLCE) shot up from 23% all the way to 40% in the aftermath of the company reporting blowout earnings on September 11, when inflection in profitability driven by sharply lower SG&A costs also resulted in the stock tripling over the course of the subsequent five trading sessions. Those gains have been largely sustained, as the stock has only shed about 4% this week through Thursday, and the bears are cutting bait and moving on. Ortex data this week saw short interest as a percentage of free float fall nine percentage points to 25.2%, while days to cover on the name has declined from 2.0 to 1.7 – a five-month low. Year-to-date, Children’s Place shares are still down 27%, however.