3 Heavily Shorted TSX Stocks to Watch This Summer

Canadians should monitor heavily shorted TSX stocks like Canada Goose Holdings Inc. (TSX:GOOS)(NYSE:GOOS) in this bear market.

Man holding magnifying glass over a document

Image source: Getty Images.

The S&P/TSX Composite Index was up 40 points in early afternoon trading on June 28. In the middle of June, the TSX Index suffered a series of retreats that drove it into an official bear market. It should come as no surprise that short interest has increased in this market correction. Today, I want to look at three TSX stocks that have attracted major short interest to kick off the summer. Should you avoid these equities or look to make a contrarian pick? Let’s jump in.

This reeling electric vehicle TSX stock is still one of the most shorted

According to recent data released by S3 Partners, Lion Electric (TSX:LEV)(NYSE:LEV) is one of the three most shorted TSX stocks. This Montreal-based company designs, develops, manufactures, and distributes purpose-built all-electric medium- and heavy-duty vehicles in North America. Shares of this TSX stock have dropped 24% month over month at the time of this writing.

This company released its first-quarter 2022 results on May 3. It delivered 84 vehicles in Q1 2022, which was 60 more vehicles than the previous year. Meanwhile, revenues were reported at $22.6 million — up from $6.2 million in the first quarter of 2021. However, its adjusted EBITDA loss worsened to $11.3 million compared to an adjusted EBITDA loss of $5.9 million in the prior year.

Lion Electric is still geared up for big earnings growth going forward. However, investors should anticipate further volatility in the near term, as it wrestles to achieve profitability.

Canada Goose has many detractors after falling sharply so far in 2022

Canada Goose (TSX:GOOS)(NYSE:GOOS) is another one of the 10 most shorted stocks on the TSX at the time of this writing. This Toronto-based winter clothing manufacturer managed to rebound nicely in 2021. However, it has succumbed to broader turbulence this year. Shares of this TSX stock have plunged 46% in the year-to-date period.

Investors got to see its fourth-quarter and full-year fiscal 2022 earnings on May 19. Total revenues increased 6.8% year over year to $223 million. It still posted a net loss of $9.1 million, or $0.09, in the final quarter of fiscal 2022. Canada Goose is still positioned to deliver strong earnings growth, as it has widened its international reach. The company also boasts an immaculate balance sheet. I’m looking to buy the dip in this winter clothing stock in the summer heat.

Crypto-focused TSX stocks are also among the most shorted right now

The cryptocurrency market has suffered a major crash in recent weeks. Hut 8 Mining (TSX:HUT)(NASDAQ:HUT) is a top crypto miner in Canada. Unsurprisingly, it has attracted significant short interest during the crypto collapse. This TSX stock has plunged 81% so far in 2022.

Hut 8 Mining is heavily reliant on crypto prices, especially in top currencies like Bitcoin and Ethereum. That means the stock will be hard to trust, as faith has been severely shaken in the crypto space. A rebound in the future is not out of the question, but I’m avoiding Hut 8 Mining and its industry peers right now.

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 has no position in any of the stocks mentioned. The Motley Fool recommends Bitcoin and Ethereum.

More on Investing

Increasing yield
Dividend Stocks

3 Cheap Canadian Stocks That Offer Over 7% Dividend Yields

Considering their high-yielding dividends and attractive valuations, these three stocks can be excellent holdings right now.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Tuesday, April 16

Canada’s latest consumer inflation report and the ongoing geopolitical tensions in the West Asia region could keep TSX stocks volatile…

Read more »

data analyze research
Tech Stocks

1 Stock I’m Buying Hand Over Fist in April Despite the Market’s Pessimism

Are you looking for a stock to buy this month despite the pessimism in the market?

Read more »

value for money
Dividend Stocks

Canadian Tire Is Paying $7 per Share in Dividends. Time to Buy the Stock?

With Canadian Tire trading ultra-cheap and offering a safe dividend yield of more than 5.5%, is it one of the…

Read more »

Male IT Specialist Holds Laptop and Discusses Work with Female Server Technician. They're Standing in Data Center, Rack Server Cabinet with Cloud Server Icon and Visualization
Tech Stocks

Constellation Software Stock: Buy, Sell, or Hold?

Constellation Software stock has rallied 186% in the last five years and is now valued at an expensive 100 times…

Read more »

Payday ringed on a calendar
Dividend Stocks

Secure Your Future: Top 2 Monthly Dividend Stocks to Buy in 2024

Here are two top Canadian monthly dividend stocks you can buy today to minimize risks to your portfolio.

Read more »

woman data analyze
Dividend Stocks

Passive Income: How Much to Invest to Get $6,000 Each Year

Have you ever wondered how much to invest to get $6,000 in passive income? It's easier than you think, and…

Read more »

Dividend Stocks

A Dividend Giant I’d Buy Over Suncor Right Now

Suncor stock is a TSX energy giant that trades at a compelling valuation while paying shareholders a tasty dividend yield.…

Read more »