Joel Kornblau - Tuesday, March 12, 10:41 AMAn examination of the most recent short interest data revealed these five Warren Buffett stocks with particularly high short interest, as measured by "days to cover." This metric is just one way to look at short data, but this is a metric we here at Holdings Channel find particularly useful because it considers both the total shares short and the average daily volume of shares traded. The number of shares short is then compared to the average daily volume, in order to calculate the total number of trading days (at the average volume) it would take to close out all of the open short positions if every share traded represented a short position being closed. So for example we found that Restaurant Brands International Inc (QSR) now has 17.43 days to cover.
Looking through the stocks held by Warren Buffett for the most recent reporting period, we found the following five stand-outs with the highest levels of short interest as measured by the number of days to cover. The first column is the Warren Buffett holding, the second column is the number of days to cover, the third column is the number of shares held at Berkshire Hathaway at last report, and the final column is the total number of shares short (in this way we can compare "Warren Buffett vs. The Shorts" as far as the relative positions).
|Warren Buffett Holding||Days To Cover||Berkshire Hathaway Shares||Short Interest|
As you can see, Restaurant Brands International Inc (QSR) is an interesting situation, as are Torchmark Corp (TMK), Red Hat Inc (RHT), United Continental Holdings Inc (UAL), and Moody's Corp. (MCO) — why are short sellers attracted to these names, while Warren Buffett has the opposite view (i.e. Berkshire Hathaway is long those stocks)? It could simply be a matter of differing viewpoint on valuation of each given stock, or there could be fundamental disagreements over what is happening at the business level and whether recent developments are positive or negative for that company's future success. Following quarterly 13F filings to keep track of Warren Buffett stock picks is warranted for investors interested in keeping track of what Warren Buffett does with these positions (adds, reduces, or exits).