Short Interest Monitor: Software, Fertilizer
The latest edition of the Short Interest Monitor features an interesting mix of firms, including a software provider, a fertilizer producer, an aerospace and defense contractor, a fiber optics specialist, and multiple pharmaceutical companies.
Short sellers targeted The Mosaic Company (MOS) in October as the leading producer of potash and phosphate fertilizer continued to struggle with soaring input costs, supply chain disruptions, and antitrust scrutiny. The wars in Iran and Ukraine have led to consistent price increases for key fertilizer inputs, like ammonia and sulfur, weighing on The Mosaic Company's margins and production capacity. MOS also faced pressure last month after the Department of Justice and Department of Agriculture signed a Memorandum of Understanding (MOU) on October 5 that elevated the threat of antitrust enforcement against U.S. fertilizer producers. USDA officials have publicly characterized The Mosaic Company and Nutrien (NTR) as a "duopoly," noting that they control more than 90% of North American phosphate and potash production. On November 3, MOS posted disappointing third-quarter earnings results amid its many headwinds. Its quarterly revenue fell 10.2% year over year to $3.1 billion, while its quarterly net loss hit $72 million.
The aerospace and defense contractor Karman Holdings (KRMN) attracted short sellers last month amid ongoing questions about its debt-funded acquisitions and lofty valuation. The spike in short interest came after CFO Mike Willis's exit plan, and a short seller report from J Capital Research, which spooked some investors in September. KRMN topped Wall Street's expectations in its third-quarter earnings report on November 5, however, with its revenue spiking 66% year over year to a record $202 million. Its net income also reached a record $21 million, while its backlog rose to $1.7 billion. KRMN still traded at more than 110 times its trailing 12-month earnings as of November 11.
The cloud-based software-as-a-service (SaaS) company Box (BOX) saw its short interest surge in late October as well. Like many of its software peers, BOX has faced questions about whether AI will disrupt its business or help boost its growth. The company is also dealing with increased competition from major tech giants, including Alphabet (GOOGL) and Microsoft (MSFT), which have bundled cloud storage and AI tools into their enterprise software suites. However, BOX shares have surged since April amid signs of strong adoption of its AI products. Bank of America analysts also named BOX as their "top pick" in a mid-October report, arguing it is an "underappreciated AI winner."
The table below shows the complete Short Interest Monitor, which features 10 equities with elevated and rising short interest. Each stock has a market cap of at least $2 billion and short interest that represents at least 10% of its outstanding shares.
|
Company |
Current short interest |
% change from last period |
Days to cover |
Short interest as a % of shares outstanding |
|---|---|---|---|---|
|
AGNC Investment (AGNC) |
150.5M |
15.8% |
5.59 |
10.3% |
|
Applied Optoelectronics (AAOI) |
18.0M |
10.7% |
1.62 |
19.2% |
|
Box (BOX) |
19.3M |
11.8% |
6.14 |
12.6% |
|
Caesars Entertainment (CZR) |
24.1M |
16.8% |
3.21 |
10.1% |
|
Enliven Therapeutics (ELVN) |
10.3M |
10.3% |
5.69 |
12.7% |
|
Floor & Decor (FND) |
15.3M |
10.7% |
4.26 |
13.0% |
|
Hut 8 (HUT) |
20.1M |
10.5% |
4.15 |
14.7% |
|
Karman Holdings (KRMN) |
19.4M |
28.4% |
6.14 |
11.4% |
|
Iovance Biotherapeutics (IOVA) |
65.2M |
10.6% |
4.17 |
13.0% |
|
The Mosaic Company (MOS) |
37.3M |
10.5% |
3.40 |
19.2% |