Travelers Companies Becomes #10 Most Shorted Dow Stock, Replacing UnitedHealth Group

Apr 29 2014, 10:03am CDT | by

The most recent short interest data has been released by the NASDAQ for the 04/15/2014 settlement date, and we here at Dividend Channel like to sift through this fresh data and order the underlying components of the Dow Jones Industrial Average by “days to cover.” There are a number of ways to look at short data, for example the total number of shares short; but one metric that we find particularly useful is the “days to cover” metric because it considers both the total shares short and the average daily volume of shares typically traded. The number of shares short is then compared to the average daily volume, in order to calculate the total number of trading days it would take to close out all of the open short positions if every share traded represented a short position being closed.

In our new rank based on the most recent short interest data from NASDAQ, Travelers Companies Inc (NYSE: TRV) has taken over the position of #10 most shorted Dow component, from UnitedHealth Group Inc (NYSE: UNH) which is now in the #7 spot.

The “days to cover” at 04/15/2014 was 3.71 for TRV, and 4.75 for UNH; this compares to the average across all Dow components of 3.17. The chart below shows the movement over time of the “days to cover” values of both TRV and UNH, versus the average Dow component.

Start slideshow:
Top 25 S.A.F.E. Dividend Stocks »/>

Below is a chart showing the relative positions of TRV versus UNH over time within the 30 Dow components, with #1 representing the component with the highest “days to cover” value (most heavily shorted) and #30 representing the component with the lowest “days to cover” value (least heavily shorted):

A stock with a high “days to cover” value compared to its peers would be considered to have a higher level of short interest as compared to those peers. This could mean short sellers are using the stock to hedge a long bet elsewhere, or could also mean that short sellers believe the price of the stock will decline. When short sellers eventually cover their positions, by definition there must be buying activity because a share that is currently sold short must be purchased to be covered. So investors tend to keep an eye on that “days to cover” metric, because a high value could predict a sharper price increase should the company put out some unexpectedly good news — short sellers might rush to cover positions, and if the “days to cover” number is high, it is more difficult to close those positions without sending the stock higher until the higher price produces enough sellers to generate the necessary volume.

Below is a three month price history chart comparing the stock performance of TRV vs. UNH:

According to the ETF Finder at ETFChannel.com, TRV and UNH collectively make up 6.50% of the SPDR Dow Jones Industrial Average ETF (DIA) which is relatively unchanged on the day Tuesday.

See what other ETFs contain both TRV and UNH »

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Bird flu hits third poultry farm in Netherlands
The Hague, Nov 22 (IANS) An outbreak of bird flu was detected at a third Dutch poultry farm, the country's ministry of economic affairs announced Friday.
 
 
Hollande to visit Guinea next week, focus on fighting Ebola
Paris, Nov 22 (IANS) French President Francois Hollande will visit the West African countries next week, including the Ebola-hit Guinea-Conakry Nov 28 and will focus on ways to eradicate the deadly virus, media reported Friday.
 
 
Carla Bruni to lend voice to combat Ebola
Paris, Nov 22 (IANS/EFE) Former model and former first lady of France, Carla Bruni, will lend her voice to the French version of the song "Do They Know It's Christmas?" to raise funds to help combat Ebola.
 
 
Spanish health worker flown home after possible Ebola contagion
Madrid, Nov 21 (IANS) A Spanish health worker with Doctors Without Borders (MSF) arrived back in Spain Friday morning from Mali after being deemed at risk of contagion from the Ebola virus.
 
 
 

Latest from the Network

Ricki Lake's estranged husband wants prenup to be thrown out
Ricki Lake's estranged husband wants a judge to invalidate their prenuptial agreement. The talk show host, who filed for divorce from Christian Evans on October 16 after two and a half years of marriage, citing...
Read more on Celebrity Balla
 
Jennifer Aniston says losing weight wasn't easy
Jennifer Aniston admits it wasn't easy to lose weight after filming 'Cake'. The 45-year-old actress ''just didn't work out for two-and-a-half months'' and relaxed her healthy diet to prepare for her role in the upcoming...
Read more on Celebrity Balla
 
Chris Pine has more respect for Broadway
Chris Pine has more respect for Broadway stars after taking singing lessons for 'Into The Woods'. The 34-year-old actor, who stars in the upcoming movie adaptation of Stephen Sondheim's Tony Award-winning musical '...
Read more on Celebrity Balla
 
Cody Simpson reunites with Gigi Hadid?
Cody Simpson and Gigi Hadid have sparked rumors they're back together. The 17-year-old singer and the 19-year-old model, who split in May after a year of dating due to their busy schedules, were reportedly ''inseparable...
Read more on Celebrity Balla
 
I felt the pressure of classism as child: Hilary Swank
Los Angeles, Nov 22 (IANS) Actress Hilary Swank says that she felt like an "outsider" at school because of her humble background. "I think we've all felt like an outsider at some point in our lives, and for me,...
Read more on Celebrity Balla
 
Sharif urges Obama to take up Kashmir issue with India
Islamabad, Nov 22 (IANS) US President Barack Obama spoke to Pakistan Prime Minister Nawaz Sharif over telephone Friday and urged him to take up the Kashmir issue with India. Sharif said an early resolution of the...
Read more on Politics Balla
 
Bayern Munich's Schweinsteiger to be back in action
Berlin, Nov 22 (IANS) Bayern Munich midfielder Bastian Schweinsteiger will recover in time for Saturday's Bundesliga home game against Hoffenheim. Bayern coach Pep Guardiola confirmed Schweinsteiger's return, but did...
Read more on Sport Balla
 
Meryl Streep a great actress: Julianne Moore
Los Angeles, Nov 22 (IANS) Actress Julianne Moore says she has always admired Meryl Streep and credited the 65-year-old for inspiring her to become an actress. "I can remember when Meryl Streep was on the cover of...
Read more on Celebrity Balla
 
Bird flu hits third poultry farm in Netherlands
The Hague, Nov 22 (IANS) An outbreak of bird flu was detected at a third Dutch poultry farm, the country's ministry of economic affairs announced Friday. The latest outbreak occurred at a poultry farm in Kamperveen...
Read more on Business Balla
 
Hollande to visit Guinea next week, focus on fighting Ebola
Paris, Nov 22 (IANS) French President Francois Hollande will visit the West African countries next week, including the Ebola-hit Guinea-Conakry Nov 28 and will focus on ways to eradicate the deadly virus, media...
Read more on Business Balla