Short Sellers Get Aggressive in Defensive High-Yield Dividend Stocks

We look at this sector’s short interest because the premium valuations in defensive stocks can come under question if the market gets too frothy and at risk of a long overdue stock market correction. 24/7 Wall St. would remind readers that short selling a high-dividend stock takes much more conviction and courage than short selling other stocks. The short seller also assumes the liability of paying that dividend out on top of just the cost to borrow a stock.

This is how the short interest played out in defensive stocks outside of the utility sector. Again, this is paramount because these are the stocks that investors may flock to if they become too worried about a rekindled banking shock in Europe or a yet-again slowing growth story in China and Asia. Altria Group Inc. (NYSE: MO) had been seeing large gains in the short interest, previously at the highest short interest of both 2014 and over the past year. AT&T Inc. (NYSE: T) saw its short interest rise only 0.5% from the middle of June to the end of the month. General Electric Co. (NYSE: GE) saw its short interest fall by a slim 1.6%, down to 68,273,172 shares short on June 30 settlement date from 69,368,486 shares short on June 13. Kimberly-Clark Corp. (NYSE: KMB) saw another large jump in its short interest, up another 8.3% after a prior 13.5% jump.

Source: 24/7 Wall St.

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