Short Interest Plummets on Apple Inc. (AAPL) and Suppliers

Short sellers recently made a quick exit from Apple Inc. (NASDAQ:AAPL) and its suppliers

by Josh Selway

Published on Dec 29, 2015 at 12:09 PM
Updated on Jun 24, 2020 at 10:16 AM

Not long ago, we discussed the overwhelming bearish tilt toward Apple Inc. (NASDAQ:AAPL) on Wall Street, as short sellers were rushing in at a surprising rate. Well, those bears didn't stick around very long. In the most recent reporting period, short interest on AAPL fell by 31.5%. 

Bears are still unusually active in the stock's options pits, though. AAPL's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in at 0.62, which is higher than nearly three-fourths of readings from the past year. In short, there's been a stronger-than-normal appetite for long puts recently. 

On the charts, AAPL pulled back recently to test support at its 100-week moving average, and has underperformed the S&P 500 Index (SPX) by nearly 10 percentage points during the past two months. Today, though, shares of the tech giant are 0.7% higher at $107.62, despite reports that iPhone shipments from production lines are running below expectations

Meanwhile, it's not just Apple Inc. (NASDAQ:AAPL) that short sellers are suddenly shying away from. Many of the company's suppliers were among the stocks that saw large decreases when the recent short interest update hit. 

For example, short interest on Cirrus Logic, Inc. (NASDAQ:CRUS) fell by over 23% during the most recent two-week period. Elsewhere, Jabil Circuit, Inc. (NYSE:JBL) saw short interest fall by nearly 20%, while Skyworks Solutions Inc's (NASDAQ:SWKS) declined by over 8%. 

Interestingly, one prominent AAPL supplier that didn't see a big drop in short interest was semiconductor stock Avago Technologies Ltd (NASDAQ:AVGO), which has been by far the best-performing stock of the bunch this year. AVGO has added 46.1% in 2015 to trade at $146.97, just below its all-time high of $150.50 from early June. 

As alluded to, bears have made their way to the stock. Specifically, short interest increased by 8.5% during the most recent reporting period, and it would now take almost six sessions for bears to cover their bets, at normal daily volumes. As such, if AVGO continues to outperform and these shorts finally throw in the towel, the shares could again find themselves in record-high territory thanks to a short-squeeze situation

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