Short sellers move away from consumer staples

Short sellers in U.S. markets have backed away from their bets against consumer staples stocks.

At the end of July, short interest in consumer staples fell to 3.23%, down 34 basis points from mid-July and the lowest level of short interest in the sector since the end of February, according to data from S&P Global Market Intelligence.

Short interest measures the percentage of outstanding shares held by short sellers, who make money when a stock declines by selling borrowed shares and buying them later at a lower price.

Consumer discretionary still leads

Consumer discretionary shares, on the other hand, remained the most-shorted sector as sellers bet that soaring inflation would continue to drag on demand.

Short interest in consumer discretionary stocks was at 5.46% at the end of July, down from 5.62% at the end of June.

Brewers saw short interest of 5.3%, drug retailers had 4.9% in short interest and short interest in food retailers hit 4.4%.

Soft drinks, with 1.9%, and hypermarkets and super centers, with 1.7%, saw the lowest levels of short interest in the consumer staples sector.

Short sellers continued to bet against Beyond Meat Inc., which had 31.3% short interest. Beyond Meat, Veru Inc., a biopharmaceutical company with 26.2% short interest, and Rite Aid Corp., with 17.8%, were the three most-shorted consumer staples companies at the end of July.

Short interest in Beyond Meat fell from 37.86% at the end of June.

ToughBuilt Industries Inc. remained the most-shorted stock on U.S. markets at the end of July, although it has come down from its peak at the end of June, when short interest surged to nearly 132%.