4 Dividend Stocks Investors Are Shorting Massively
While the equity market rally continues this year, several dividend-paying stocks are seeing heavy investor short selling. There are several reasons to sell stocks short. Some investors are pessimistic about the future outlook of the shorted companies, others use short positions to hedge their long exposures, and some engage in merger arbitrage. In general, investors are using this trading activity to optimize their portfolios and maximize returns.
Currently, investors are shorting a number of dividend payers with large dividend yields, assuming, in some cases, that dividend payouts may be unsustainable. At present, investors are heavily shorting American Greetings Corp. (NYSE:AM), GameStop Corp. (NYSE:GME), Safeway Inc. (NYSE:SWY), and Pitney Bowes (NYSE:PBI). When analyzing the shorted stocks, the attention is paid to short interest as percentage of the float, the latter representing the total number of shares available for trading. Here is a closer look at the noted four stocks, with a particular attention paid to the sustainability of their dividend payouts.