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GOLDMAN: Hedge funds are betting billions that these 19 stocks are going down
While most investors in the stock market are looking for prices to go up, many hedge fund managers are betting billions of dollars that some stock prices will go down.
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Goldman Sachs just released its new quarterly "Hedge Fund Trend Monitor" report, detailing the positions of the top hedge funds.
Within the report, Goldman presented its "Very Important Short Position" list, the collection of the S&P 500 stocks with the highest dollar value of short interest outstanding at the end of the third quarter.
The list includes multiple companies in the oil, retail, and technology industries.
We've ranked the stocks from smallest dollar value of short interest to largest. Also included is the percentage of floated stock that is short interest and a comment from company executives.
Ticker: SYY
Subsector: Food Distributors
Value of short interest (in billions): $2.0
Short interest of % of float: 9%
Executive comment: "However, sales growth was minimal and earnings were essentially flat due in large part to the unfavorable impact of both food cost deflation and currency translation. These two factors have somewhat restrained our performance for a good portion of the calendar year and we expect that these headwinds will persist for the next few months," said CEO William DeLaney.
Source: Goldman Sachs
Ticker: HAL
Subsector: Oil & Gas Equipment & Services
Value of short interest (in billions): $2.1
Short interest of % of float: 6%
Executive comment: "As expected, it was another very challenging quarter for the services industry. Activity levels and pricing took another hit across the globe, as our customers respond to the impact of reduced commodity prices, and the pressure that their own shareholders are putting on them," said CEO Dave Lesar.
Source: Goldman Sachs
Ticker: WMT
Subsector: Hypermarkets & Super Centers
Value of short interest (in billions): $2.1
Short interest of % of float: 2%
Executive comment: "As we expected, operating income continued to be pressured by our decision to invest in our frontline associates. To improve the store experience for our customers and create a bridge to our future where digital capabilities will play an increasing role in our stores, we're making a $1.2 billion planned investment in our people this year that we understood what impact near-term operating income. This is by far the biggest driver of the decline in consolidated operating income," said CEO Doug McMillon.
Source: Goldman Sachs
Ticker: VZ
Subsector: Integrated Telecommunication Services
Value of short interest (in billions): $2.1
Short interest of % of float: 1%
Executive comment: "Our overall revenue mix continues to change, driven by the unsubsidized equipment model, increasing video demand in Wireless and a higher mix of broadband and FiOS. As these trends evolve over the near-term we expect future revenue growth to result from increased video and Internet of things traffic, enabling new business models in wireless and continued broadband demand in Wireline," said CFO Frank Shammo.
Source: Goldman Sachs
Ticker: CVX
Subsector: Integrated Oil & Gas
Value of short interest (in billions): $2.1
Short interest of % of float: 1%
Executive comment: "It's clear that low prices have reduced upstream earnings for the sector, and, for Chevron, we're no exception. Prices are low because the market is producing more than consumers want, but the markets are showing signs of rebalancing," said CEO John Watson.
Source: Goldman Sachs
Ticker: ACE
Subsector: Property & Casualty Insurance
Value of short interest (in billions): $2.2
Short interest of % of float: 6%
Executive comment: "I want to now say a few words about current commercial P&C market conditions. The underwriting environment continued to grow more competitive in the quarter for our commercial P&C business globally. With some exceptions, price declines accelerated modestly. They were varied by class of business and geography," said CEO Evan Greenberg.
Source: Goldman Sachs
Ticker: TGT
Subsector: General Merchandise Stores
Value of short interest (in billions): $2.5
Short interest of % of float: 5%
Executive comment: "Sales in signature categories have been growing much faster than our overall sales, and they’re clearly exceeding industry benchmarks. So, while consumers continue to spend cautiously, we feel confident as we enter the holiday season. And we’re focused on continuing to deliver on both our strategic priorities and our financial goals," said CEO Brian Cornell.
Source: Goldman Sachs
Ticker: MON
Subsector: Fertilizers & Agricultural Chemicals
Value of short interest (in billions): $2.8
Short interest of % of float: 6%
Executive comment: "Despite weakening global currencies and commodity prices, we continue to view this as a time of opportunity, but a balance of innovation and discipline can grow our long-term competitive position. There's always the possibility of fluctuations in the short-term market conditions, but that doesn't define the overall opportunity or the continued long-term growth trends," said CFO Hugh Grant.
Source: Goldman Sachs
Ticker: AVGO
Subsector: Semiconductors
Value of short interest (in billions): $2.8
Short interest of % of float: 9%
Executive comment: "I am very pleased with our execution which drove Q3 margins and earnings per share to the high-end of our expectation. We continue to see good demand driven by our diverse portfolio of highly differentiated solutions. We believe our focus on sustainable franchises provide us with a firm foundation to consistently deliver strong operating results," said CEO Hock Tan.
Source: Goldman Sachs
Ticker: JNJ
Subsector: Pharmaceuticals
Value of short interest (in billions): $2.9
Short interest of % of float: 1%
Executive comment: "We continue to execute well on our portfolio management strategy, consistent with the plans we laid out for the year and we're pleased with the solid underlying sales results and continued solid earnings per share performance thus far in 2015. We are well positioned for continued growth in today's dynamic healthcare environment," said CFO Dominic Caruso.
Source: Goldman Sachs
Ticker: BA
Subsector: Aerospace & Defense
Value of short interest (in billions): $2.9
Short interest of % of float: 3%
Executive comment: "The commercial airplane business environment generally remains healthy, driven by improving airline profitability, solid air passenger traffic and meaningful replacement demand. Air cargo traffic remains a watch item for us as the gradual market recovery continues amid modest overall global economic growth rates. Airplane order activity and customer discussions are continuing at a moderated but historically healthy pace. Deferral requests and cancellations remain well below the historical average," said CEO Dennis Muilenburg.
Source: Goldman Sachs
Ticker: CAT
Subsector: Construction Machinery & Heavy Trucks
Value of short interest (in billions): $3.0
Short interest of % of float: 7%
Executive comment: "There's no question that the China-driven commodity supercycle drove a lot of things up in the world the last decade or so. And now we're living off the backlash of that. It's kind of amazing to me that even with that, the amount of mining activity going on, that is ore, and overburdened being moved with the exception of coal is still running at a pretty high level around the world. And that is one of the things that has kind of baffled us in terms of the replacement cycle," said CEO Douglas Oberhelman.
Source: Goldman Sachs
Ticker: IBM
Subsector: IT Consulting & Other Services
Value of short interest (in billions): $3.2
Short interest of % of float: 3%
Executive comment: "So as we transform our business, we invest where we see higher value over the longer term. We drive growth in the areas where we're investing, while other areas decline as we shift the business and we expect to expand margins in our move to higher value. This is how we transform from one era to the next," said CFO Martin Schroeter.
Source: Goldman Sachs
Ticker: SLB
Subsector: Oil & Gas Equipment & Services
Value of short interest (in billions): $3.3
Short interest of % of float: 3%
Executive comment: "Despite the very challenging environment both in terms of pricing and activity, pre-tax operating margins only declined by 101 basis points sequentially. This was due to the continued strong and proactive cost management across the entire organization," said CFO Simon Ayat.
Source: Goldman Sachs
Ticker: INTC
Subsector: Semiconductors
Value of short interest (in billions): $3.7
Short interest of % of float: 2%
Executive comment: "Despite ongoing macroeconomic headwinds, there are signs that the PC market is beginning to stabilize and we continue to benefit from a strategy designed to capitalize on the growing need for the infrastructure that powers the smart and connected world," said CEO Brian Krzanich.
Source: Goldman Sachs
Ticker: T
Subsector: Integrated Telecommunication Services
Value of short interest (in billions): $3.8
Short interest of % of float: 2%
Executive comment: "With the close of our DTV acquisition, we became a unique U.S. competitor. We are the first scaled communications and video provider to offer customers fully integrated nationwide products. Our focus is on profitable growth, and we believe that we have in place the products and the platforms that will enable our success," said CFO John Stephens.
Source: Goldman Sachs
Ticker: ESRX
Subsector: Health Care Services
Value of short interest (in billions): $3.8
Short interest of % of float: 7%
Executive Comment: "Over the past 30 years, we have built and expanded our core business while continually evolving to keep our clients ahead of the changing healthcare environment. Today, there is more talk than ever about the cost of drugs. Whether it's a pharmaceutical company increasing the price of an old generic drug overnight or a biotech charging hundreds of thousands of dollars for a new drug, payers are facing unprecedented challenges," said CEO George Paz.
Source: Goldman Sachs
Ticker: XOM
Subsector: Integrated Oil & Gas
Value of short interest (in billions): $4.1
Short interest of % of float: 1%
Executive comment: "Global economic growth slowed during the third quarter. In the U.S., growth tapered following a strong second quarter. China's economy continued to decelerate, and the recovery in Japan remained weak. However, there is some evidence of economic stabilization in Europe. Crude oil prices resumed their decline after improving in the second quarter, whereas global refining margins strengthened during the quarter. And in chemicals, both commodity and specialty product margins also improved," said Secretary and SVP of Investor Relations Jeffrey Woodbury.
Source: Goldman Sachs
Ticker: DIS
Subsector: Movies & Entertainment
Value of short interest (in billions): $6.7
Short interest of % of float: 4%
Executive comment: "We also decided to be candid, I think maybe refreshingly so, about what the industry was experiencing in terms of sub losses during roughly the last period. And we feel that there certainly should be no reason to panic over comments like that. The fact remains that we're in an environment today that's definitely changing, it's different than the environment before, there's a lot more competition for people's time," said CEO Bob Iger.
Source: Goldman Sachs
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