GOLDMAN SACHS: Hedge funds are betting billions that these 18 stocks are doomed

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Stringer/Reuters

Hedge funds have had a great year picking stocks. But there’s a dark underbelly to their investment activity that involves betting on companies to falter.

To see which stocks bear the biggest burden of hedge fund shorts, the equity strategy team at Goldman Sachs analyzes 821 funds that hold a combined $1.9 trillion in gross equity positions, then identifies the stocks that have the highest dollar value of short interest outstanding.

Known as the Very Important Short Position list, the basket excludes companies in Goldman’s hedge fund VIP index, as well as stocks with more than 10% of float-adjusted shares held short. It also has a large-cap bias, with a median market capitalization of $71 billion, compared with $20 billion for the S&P 500.

Here’s a list of the 18 stocks in the index that have the highest level of short interest:


18. Target

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Markets Insider

Ticker: TGT

Subsector: General merchandise stores

Total return year-to-date: -21%

Value of short interest: $1.9 billion

Source: Goldman Sachs


17. Boeing

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Markets Insider

Ticker: BA

Subsector: Aerospace & defense

Total return year-to-date: 16%

Value of short interest: $2 billion

Source: Goldman Sachs


16. Lam Research

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Markets Insider

Ticker: LRCX

Subsector: Semiconductor equipment

Total return year-to-date: 42%

Value of short interest: $2 billion

Source: Goldman Sachs


15. Procter & Gamble

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Markets Insider

Ticker: PG

Subsector: Household products

Total return year-to-date: 4%

Value of short interest: $2 billion

Source: Goldman Sachs


14. Simon Property Group

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Markets Insider

Ticker: SPG

Subsector: Retail REITs

Total return year-to-date: -12%

Value of short interest: $2 billion

Source: Goldman Sachs


13. CVS Health

source
Markets Insider

Ticker: CVS

Subsector: Drug retail

Total return year-to-date: -2%

Value of short interest: $2 billion

Source: Goldman Sachs


12. Express Scripts

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Markets Insider

Ticker: ESRX

Subsector: Healthcare services

Total return year-to-date: -14%

Value of short interest: $2 billion

Source: Goldman Sachs


11. Chevron

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Markets Insider

Ticker: CVX

Subsector: Integrated oil & gas

Total return year-to-date: -9%

Value of short interest: $2.1 billion

Source: Goldman Sachs


10. AbbVie

source
Markets Insider

Ticker: ABBV

Subsector: Biotechnology

Total return year-to-date: 7%

Value of short interest: $2.2 billion

Source: Goldman Sachs


9. Intuitive Surgical

source
Markets Insider

Ticker: ISRG

Subsector: Healthcare equipment

Total return year-to-date: 36%

Value of short interest: $2.2 billion

Source: Goldman Sachs


8. Caterpillar

source
Markets Insider

Ticker: CAT

Subsector: Construction machinery & heavy trucks

Total return year-to-date: 10%

Value of short interest: $2.2 billion

Source: Goldman Sachs


7. ExxonMobil

source
Markets Insider

Ticker: XOM

Subsector: Integrated oil & gas

Total return year-to-date: -8%

Value of short interest: $2.3 billion

Source: Goldman Sachs


6. General Electric

source
Markets Insider

Ticker: GE

Subsector: Industrial conglomerates

Total return year-to-date: -12%

Value of short interest: $2.7 billion

Source: Goldman Sachs


5. Walmart

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Markets Insider

Ticker: WMT

Subsector: Hypermarkets & supercenters

Total return year-to-date: 14%

Value of short interest: $2.7 billion

Source: Goldman Sachs


4. Nvidia

source
Markets Insider

Ticker: NVDA

Subsector: Semiconductors

Total return year-to-date: 25%

Value of short interest: $3 billion

Source: Goldman Sachs


3. IBM

source
Markets Insider

Ticker: IBM

Subsector: IT consulting & other services

Total return year-to-date: -8%

Value of short interest: $3 billion

Source: Goldman Sachs


2. Intel

source
Markets Insider

Ticker: INTC

Subsector: Semiconductors

Total return year-to-date: -1%

Value of short interest: $3.3 billion

Source: Goldman Sachs


1. AT&T

source
Markets Insider

Ticker: T

Subsector: Integrated telecommunications services

Total return year-to-date: -9%

Value of short interest: $5.3 billion

Source: Goldman Sachs


SEE ALSO:

GOLDMAN SACHS: These are the 14 VIP stocks that matter most to hedge funds