Most consumer staple stocks see a decline in short bets in May

The short interest on 14 out of 38 consumer staple stocks—part of the Consumer Staples Select Sector SPDR Fund (NYSEARCA:XLP)—increased in May vs. the previous month. The remaining 24 stocks saw a fall in their short interest.

Short bets fell for 11 out of 13 industries in the consumer staples sector. The average grand total short interest also fell to 2.05% in May from 2.17% in April for defensives.

Industry Analysis:

In the consumer defensive/staples sector, Distillers and Vintners remained the most shorted industry, with an average short interest of 7.59% vs. the previous month’s 7.74%.

Brewers were the second most shorted industry had the second-highest short interest of 7.05% in May, vs. 6.48% last month.

Short interest in the Soft Drinks and Non-alcoholic Beverages segment was lowest at 1.14% vs. 1.31% prior. Household Products was the second-lowest segment, with a short interest of 1.19% vs. 1.20%.

Short interest, which could potentially be an indicator of pessimism, calculates the number of shares sold against the company’s float. (Short Interest % = Number of Shares Sold Short ÷ Stock Float). To note, consumer staples often underperform in rising markets but beat the falls.

Least shorted stocks:

• Philip Morris International (NYSE:PM): 0.72% vs. 0.90% last month
• Coca-Cola (NYSE:KO): 0.75% vs. 0.94%
• Procter & Gamble (NYSE:PG): 0.75% vs. 0.80%
• Walmart (NYSE:WMT): 0.95% vs. 1.10%
• Costco WHolesale (NASDAQ:COST): 1.23% vs. 1.36%

Most shorted stocks:

• Brown-Forman (NYSE:BF.B): 9.78% vs. 9.86%
• Campbell Soup (NASDAQ:CPB): 9.72% vs. 9.38%
• Molson Coors Beverage (NYSE:TAP): 7.05% vs. 6.47%
• Dollar Tree (NASDAQ:DLTR): 6.51% vs. 7.38%
• Hershey Foods (NYSE:HSY): 5.81% vs. 5.58%

The S&P 500’s consumer staples sector ETF (NYSEARCA:XLP) gained 2.11%, compared to broader S&P 500 ETF Trust (NYSEARCA:SPY) gain of 5.49%.

ETFs to tab consumer staples: (NYSEARCA:VDC), (NYSEARCA:IYK), (NYSEARCA:FSTA), (NYSEARCA:KXI), (NYSEARCA:FXG), (NYSEARCA:RSPS).