Short Report: CompoSecure shorts at multi-month lows

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 down 2.8%, the Nasdaq Composite was down 3.7%, the Russell 2000 index was down 2.1%, the Russell 2000 Growth ETF (IWO) was down 2.5%, and the Russell 2000 Value ETF (IWN) was down 1.7% in the four-day trading session range through January 2.

SHORT INTEREST GAINERS –

• Ortex-reported short interest on Icahn Enterprises (IEP) had tracked sideways in mid-teens since mid-November before growing by over five percentage points in the final week of the year. Shorts as a percentage of free float rose from 16.5% to 21.8%, though days to cover retrenched from 15.9 to 14.4, reflecting a notable increase in trading volume over the four sessions following Christmas holiday. The stock has also been more volatile heading into the year end, with an overall 28% slide from mid-November and a 1.4% decline in the four day period through Thursday.
• Ortex-reported short interest on Structure Therapeutics (GPCR) has ranged within 18.5%-21.5% band since mid-September against a pronounced decline in stock price, which is down 39% from September 23 high. This week, shorts as a percentage of free float bounced off the bottom of that range on Friday and rose to 20.5%. Days to cover was also higher, increasing from 8.5 to 9.7 on collapsing volume in the final week of the year. In the four-day period covered, Structure Therapeutics was down 4.5%. Overall, the stock had fallen 32% in 2024.
• Ortex-reported short positioning on Forward Air (FWRD) gained another percentage point this week to 21% for its second consecutive week of marginal gains. Shorts as a percentage of free float on a Forward Air is now within a point of three-month highs. Days to cover on the name, meanwhile, was up 100 basis points to 9.1 – hitting its highest level since early October. The stock has had a tepid December, declining 31% from the start of the month through Christmas holiday but has since rallied about 18%, with an especially strong Friday trading session that saw a 5% gain.

SHORT INTEREST DECLINERS –

• Estimated short interest on CompoSecure (CMPO) peaked in the second half of October around 65% and bounced around that level through the first week of November into earnings, though after the EPS shortfall and reduced midpoint guidance drove a 10% drop, bears had also scaled down their exposure. Short positioning as a percentage of free float has been falling ever since, while supporting the stock price and its bounce back to pre-earnings highs. This week, short interest was down from 23.6% to 18.7% – the lowest level since April of 2023. The stock’s momentum meanwhile has been augmented by the announcement that CompoSecure would spin off Resolute Holdings, prompting a 5% jump in shares. For 2024, CompoSecure had tripled in value, though in the four-day period covered, the stock was down 5%.
• Ortex-reported short interest on Kiniksa Pharmaceuticals (KNSA) had peaked in the first week of September around 34%, coinciding with the year’s high achieved just a week prior, though with shares caving after a disappointing Q3 earnings print in October, bearish positioning has also been significantly scaled down. This week, shorts as a percentage of free float on the name fell from 19.6% all the way down to 15.4%, and while days-to-cover on the stock was up from 3.5 to 4.7, this is well off the 9.1 level in November. The stock was flat on the week, and while Kiniksa was up as much as 60% in 2024 at its best level pre-Q3 earnings, shares finished the year up a more modest 13%.