Betting against material stocks witnessed a decline at the close of June compared to the end of May. The lithium behemoth Albemarle (ALB) emerged as the most shorted stock in the sector, while the water solutions company Ecolab (ECL) secured the position for the least shorted stock.
On average, short interest across material stocks in the S&P 500 index dwindled to 1.96% of floating shares by the end of June, a drop from 2.12% at the culmination of May.
The S&P 500 Materials sector (NYSEARCA:XLB) showcased a 5.8% surge thus far in the year, paling in comparison to the robust 17.7% uptick in the benchmark SP500 index during the same period.
As of June 30, Albemarle (ALB) witnessed over 15.5 million shares sold short, accounting for 13.25% of the floating shares. Despite the recent plummet of the company’s shares to nearly four-year lows, Wells Fargo revised Albemarle’s rating from overweight to equal weight, setting a price target of $100, lowered from $145.
FMC Corp (FMC) stood as the second most shorted material stock with 6.99% of floating shares, a slight dip from 7.24% at the conclusion of May. Simultaneously, bets against American pulp and paper company International Paper (IP) escalated to 6.56% from 5.45% a month prior.
Meanwhile, Ecolab (ECL) lagged behind PPG Industries (PPG) and DuPont de Nemours (DD), exhibiting a short interest of 1.11%. They are all part of the chemicals industry.
Insights into the Industry
Average short interest calculated as a percentage of floating shares
Containers & packaging maintained the status of being the most shorted industry within the sector, with a short interest of 2.24% at the juncture of June—down marginally from 2.54% in May’s aftermath.
Chemicals stocks secured the second position with a 2.01% short interest by the end of June, compared to 2.06% a month back.
Contrarily, Metals & Mining, housing stocks like Newmont (NEM) and Freeport-McMoRan (FCX), found themselves as the least shorted industry in the sector, boasting a short interest of 1.67% by June 30.