Big Short Activity In These 5 Canadian Names

Checking in on some big swings that have occurred over the past couple of weeks.

| More on:
The Motley Fool

A couple of times each month the Toronto Stock Exchange puts out its Top 20 Largest – Consolidated Short Position report.  And while it’s interesting to see which names pop up at the top of the list — this month it happens to be Lundin Mining (TSX:LUN) – perhaps more interesting are the changes that have occurred since the prior report was released.

The table below provides a look at the big movers in the recently released, end of July report.

Company Name

As of July 31

As of July 15

% Change

Encana Corp. (TSX:ECA)     30,267,766







Bombardier (TSX:BBD.B)




Great-West Life (TSX:GWO)




Manulife (TSX:MFC)




Source:  TMX Group

During this period, Encana reported reasonable earnings, however the real catalyst for this company will be the release of its strategic review by the end of the year.  Clearly, some are doubting that this review will be well received by the market.

BCE didn’t even appear on this list at the end of June and is clearly feeling the impact of Verizon’s announcement that it may be coming to Canada.  Because of its healthy yield, BCE is a tough stock to short.  You see, short sellers are responsible for covering the dividend.  Therefore, an extra level of conviction is required to take this kind of position against such a big yield.  Conversely, the proceeds from a BCE short sale could be dumped into a long position that carries a similar yield to help cover this burden.

Bombardier missed its self-imposed deadline for its C-Series first flight at the end of June but seemingly did a good job of re-assuring the market that this really wasn’t a big deal.

And the more buoyant interest rate environment of late has clearly had an impact on the shorts that had targeted the Canadian life co’s.

Manulife especially has experienced an even more dramatic decline if we consider that in the middle of June it was the most heavily shorted stock, according to the TMX, in the Canadian market at 82 million shares.  This position has unwound by nearly 50 million shares since then.

Foolish Takeaway

To be clear, often times these short positions will only represent a portion of a bigger trade that an institutional money manager might have in place.  However, there’s something to be said for such dramatic swings.

The Motley Fool has created a special FREE report that that identifies 3 U.S. businesses that are so dominant no short-seller in their right mind should ever think of touching them.  Simply click here to receive “3 U.S. Stocks Every Canadian Should Own” – FREE! 

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.

Follow us on Twitter and Facebook for the latest in Foolish investing.

Fool contributor Iain Butler does not own shares in any company mentioned at this time.  The Motley Fool doesn’t own shares in any of the companies mentioned.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Investing

Index funds

Got $500 to Invest in Stocks? Put it in This Index Fund

Here's why I like this index fund.

Read more »

A colourful firework display
Tech Stocks

3 TFSA Stock Picks With Explosive Potential

Want some explosive growth in your TFSA. These small-cap stocks have risks, but they could also have some massive reward.

Read more »

Dollar symbol and Canadian flag on keyboard

1 Canadian Stock to Buy and Hold Forever in Your TFSA

Shopify (TSX:SHOP) stock is back on the retreat, but it's still a top tech buy for TFSA investors seeking value…

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Thursday, July 25

The U.S. GDP quarterly growth numbers will remain on TSX investors’ radar today as they continue to assess the Bank…

Read more »

Family relationship with bond and care

Retiring Soon? Add These Dividend-Paying Stocks to Your Portfolio

Here are two of the best TSX dividend stocks you can add to your retirement portfolio today and hold for…

Read more »

man touches brain to show a good idea
Dividend Stocks

Pembina Vs. Brookfield Renewable: Which High-Yield Dividend Stock Is Better?

Both Pembina Pipeline (TSX:PPL) and Brookfield Renewable Partners (TSX:BEP.UN) look like strong dividend stocks, but is one better?

Read more »

Road signs rerouting traffic
Tech Stocks

Forget Nvidia Stock: 2 Tech Stocks to Buy Instead

There are clear winners, and then there are popular choices. And Nvidia stock (NASDAQ:NVDA) has erred towards simply popular.

Read more »

Stock Market

Here Are My Top 2 Stocks to Buy in July 2024

Here's why top TSX stocks such as Cameco are positioned to deliver outsized gains to shareholders in the upcoming decade.

Read more »