Short sellers boost bets against utility stocks to highest level in years

Short sellers increased their bets against utility stocks in June to the highest level in at least eight years.

Short interest in utilities, a sector that includes electric, gas and water companies, was at 3.0% at the end of June, up 70 basis points from the same point a year earlier, according to the latest S&P Global Market Intelligence data.

Short interest in utility stocks jumped to the highest level since 2016, to 3.0% at the end of June from 2.8% at the end of May, as the S&P 500 utilities sector fell by 5.8% during the month. As of July 17, the sector has rallied about 9.1% since the start of the year, despite its stumble in June.

Short interest increased in most sectors from the end of May to the end of June. Consumer discretionary remained the most-shorted sector, with short interest climbing from 5.4% to 5.6%, the highest level of bets against this sector since the end of April.

Sector breakdown

Within the utility sector, commercial and residential solar power company Sunnova Energy International Inc. was the most-shorted company with short interest at 28.8% at the end of June, up from 27.9% at the end of May. Sunnova's stock fell nearly 77% from the start of 2024 to May 1, but it has since rallied nearly 107%.

Hawaiian Electric Industries Inc. was the second most-shorted utility stock, with 22.7% short interest, up from 21.4% at the end of May. Hawaiian Electric's stock plummeted more than 75% after the devastating Maui fires in August 2023. The stock has gained 42% since the end of June on reports that Maui County is preparing a settlement for thousands of people impacted by the fires, which could potentially keep the electric company from some legal proceedings.

Within the utility sector, electric utilities were the most shorted industry at the end of June with 3.3% short interest, up from 3.1% at the end of May.

Most shorted overall

Volcon Inc. was the most-shorted stock on major US exchanges at the end of June, with 51.8% short interest, followed closely by Blue Star Foods Corp. with short interest at 51.4%

GeoVax Labs Inc. was the third most-shorted stock, with short interest at 49.7% at the end of June.

Short interest in the three stocks increased dramatically from mid-June when short interest in all three was still in the single digits.