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Here Are the 3 Most Shorted TSX Stocks Today

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The S&P/TSX Composite Index was down seven points in mid-afternoon trading on June 16. Short interest has stirred in North American markets in the spring after a year-long bull run. Stocks have performed well after the March 2020 market pullback, as investors were spooked by the beginning of the COVID-19 pandemic. However, historic government intervention and continued monetary stimulus has kept markets frothy. Today, I want to look at three TSX stocks that are being targeted by short-sellers right now. There has been a shake up from the short interest we saw in early February.

This top insurance stock is one of the most shorted on the Canadian market

Sun Life (TSX:SLF)(NYSE:SLF) is a Toronto-based insurance and financial services company. Its shares have climbed 12% in 2021 as of close on June 16. The stock is up 27% from the prior year.

In February, I’d discussed why Sun Life offered solid value on the TSX. Fast forward to the middle of June, and Sun Life is one of the most shorted stocks on the Canadian market. Shares of Sun Life hit technically overbought territory in early May. However, since then, it had retreated to threaten oversold levels. Moreover, it still boasts a favourable price-to-earnings (P/E) ratio of 12.

This TSX stock still offers solid value and a 3.4% dividend yield. I’m not letting the short interest scare me away from this promising insurance-focused equity.

A red-hot TSX stock that has a bullseye on its back

Suncor (TSX:SU)(NYSE:SU) is a Calgary-based integrated energy company — one of the true heavy hitters in Canada. This TSX stock has increased 44% in 2021. It has climbed on the back of improved oil and gas prices, which have powered inflation in Canada this year.

Regardless, its hot streak has apparently attracted short interest in the late spring. There are some justifications for this outlook. Suncor’s P/E ratio is way out of whack, as it just managed to claw its way back to profitability in the first quarter of 2021. Moreover, it last had an RSI of 65. It has hovered just below or above overbought levels for the entire month of June.

Still, this TSX stock is well positioned to benefit from a resurgent oil and gas sector. I’m still bullish on Suncor today.

One more shorted TSX stock to watch today

TD Bank (TSX:TD)(NYSE:TD) is the last TSX stock that has attracted major short interest at the time of this writing. It is the second-largest financial institution in Canada. This TSX stock is up 22% in the year-to-date period. Its shares are up 41% from the prior year.

Canadian banks have put together a strong first half of fiscal 2021. The reopening economy is expected to have a continued positive impact on results. Is the short interest in this TSX stock justified?

Shares of TD Bank last had a favourable P/E ratio of 11. The TSX stock jumped into technically overbought territory after releasing its Q2 2021 results in late May. However, it has since taken a breather. I still like bank stocks as we look ahead to what should be a promising Canadian summer when it comes to the economic rebound.

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.

Fool contributor Ambrose O'Callaghan owns shares in Suncor Energy Inc. The Motley Fool has no position in any of the stocks mentioned.

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