3 Stocks with Surging Short Interest

Yelp Inc (YELP), Yandex NV (YNDX), and Expedia Inc (EXPE) are among the stocks that saw huge bumps in short interest recently

by Alex Eppstein

Published on Jul 27, 2015 at 2:33 PM
Updated on Jul 27, 2015 at 2:42 PM

One of the indicators we use frequently at Schaeffer's is short interest, which measures the number of a stock's shares that are sold short. High short interest levels typically correspond with negative expectations, as short sellers anticipate they'll be able to buy back or cover their positions at a cheaper price than the one at which they initially sold the shares. With that in mind, check out this list of the 50 names that saw the biggest percentage increases in short interest during the most recent reporting period, courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. Of these stocks, we're going to highlight three below: Yelp Inc (NYSE:YELP), Yandex NV (NASDAQ:YNDX), and Expedia Inc (NASDAQ:EXPE).

150727shortinterest

Short interest on YELP jumped 43% during the latest reporting period, and now makes up 17% of its total float. This isn't surprising, given that shares of the business review site have plummeted 38.4% year-to-date at $33.73, and touched a two-year low of $33.35 last week.

There's still room left on the bearish bandwagon, too. Thirteen analysts consider Yelp Inc a "buy" or better, setting the stage for future downgrades. Also, the stock's consensus 12-month price target of $51.69 represents levels not explored since late April. Should YELP continue to struggle -- or disappoint during tomorrow night's trip to the earnings confessional -- a round of price-target cuts could ensue.

Forex issue YNDX saw its short interest levels spike 61% during the most recent reporting period. As such, expectations are high that the stock will add to its year-to-date deficit of 18%. Earlier this month, the shares touched $13.90 -- matching their record low from March 11 -- but were last seen at $14.73.

For some reason, analyst have kept the faith. Three-quarters of analysts tracking Yandex NV have doled out "strong buy" endorsements, with not a single "sell" to be found. As with YELP, this leaves YNDX vulnerable to a round of negative analyst attention, which could intensify selling pressure. Looking ahead, the company will release quarterly results on Thursday morning.

Short interest on travel concern EXPE popped 26% during the latest report period, but unlike the previous pair of stocks, this one is an outperformer. Year-to-date, the shares have added almost 23% to trade at $104.87. In fact, the equity's ability to rally in the face of selling pressure speaks to its underlying strength.

Short interest could be the key to EXPE's next big move up the charts. At the stock's average trading levels, it would take more than eight sessions to buy back the 11.6 million shares sold short. In other words, there's plenty of sideline cash available to fuel future gains.

Separately, Benchmark boosted its price target on Expedia Inc by $10 to $130. If the company can top expectations this Thursday evening in the earnings confessional, more upward revisions could be forthcoming. EXPE's average 12-month price target of $113.46 represents a slim 8% premium to the stock's current perch.


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