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Short Interest Movers: Och-Ziff, US Airways, Dr Pepper Snapple, and Avon Products

OZM, LCC, DPS, and AVP see notable changes in short interest during the past two weeks

by 3/12/2013 1:23:18 PM
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The bi-weekly list of tickers with the 25 biggest gains and declines in short interest includes an investment firm, an airline trying to merge with a bigger rival, a soft drink giant, and a well-known cosmetics retailer. No individual candidate for a short-squeeze rally stands out, but there still are some tickers to take note of.

Short Interest Increases

  • Och-Ziff Capital Management Group LLC (NYSE:OZM - 9.31) had the highest overall percentage increase in short interest over the last two weeks with a 234% hike. But short interest still only accounts for 2.7% of OZM's total float, and it would only take fewer than two trading sessions to unwind those shorted positions, based on normal trading volumes. OZM shares have backed off a bit after hitting an annual intraday high of $10.87 on Feb. 7 and are down 14.4% since then. And option traders have rarely been so bearish on the stock: the stock's Schaeffer's put/call open interest ratio (SOIR) stands at 2.07, which ranks higher than all but 6% of other readings taken in the last year. In other words, traders have rarely been so put heavy as they are currently.

  • US Airways Group, Inc.'s (NYSE:LCC - 15.23) proposed merger with American Airlines (currently in Chapter 11 bankruptcy reorganization) has drawn out a big group of investors looking to short LLC shares. This is perhaps to leverage those newly shorted positions against a new combined company -- part of a fairly common arbitrage tactic used in case of a merger. Short interest spiked 48% in the last two weeks, and it now accounts for 21.2% of LCC's total float -- the highest percentage on the list. But it would still take only about 3.5 days for traders to unwind their short positions in LCC, not quite in short-squeeze territory yet. LCC shares are up 12.7% this year and are threatening to top the annual high of $15.64 set on Jan. 23. Options sentiment remains mixed: the stock's SOIR is only 0.48 and ranks in the 15th percentile compared with the last year's data, meaning that put open interest on options that expire in the next three months isn't far from an annual low. But the equity's 10-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at 0.90, which ranks higher than 74% of all readings taken over the past year. In other words, put buying has accelerated during the past two weeks, relative to typical levels.
List of Largest Short Interest Increases

Short Interest Decreases

  • Dr Pepper Snapple Group Inc. (NYSE:DPS - 44.19) saw its short interest decline 29%, and short interest now accounts for 3.2% of the company's total float. At that rate, it would take investors just under three days to unwind their shorted positions. DPS shares have had a rocky road lately, dropping nearly 6% on Feb. 13 following a disappointing earnings result. But the shares have since rallied somewhat and are now trading clearly above their 20-day moving average, which is perched at about $43.50. Still, option traders remain bearish toward DPS: the equity's 50-day put/call volume ratio on the ISE/CBOE/PHLX rests at 1.71, and that ranks higher than 94% of other readings taken in the last year -- indicating a very high preference for put buying recently.

  • Avon Products, Inc. (NYSE:AVP - 20.12) saw short interest fall 43% in the last two weeks. Short interest now only accounts for 1.6% of the company's float, and it would take just over one trading day for investors to unwind these short positions. And perhaps due to a rally that has AVP up 40.2% on the year, longer-term option traders appear to be bullish on this stock. The 50-day call/put volume ratio on the ISE/CBOE/PHLX is 3.63, meaning traders have preferred calls to puts by a more than three-to-one margin when opening new positions. In addition, that rates in the highest 83% of all readings taken in the last year -- indicating a current elevated preference for calls.
List of Largest Short Interest Decreases

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