Short bets against S&P 500 healthcare stocks climb in June; MRNA tops list again

The average short interest for the S&P 500 Health Care Index Sector (NYSEARCA:XLV) experienced an increase in June, moving from 1.90% in May to 1.96%, indicating a collective rise in negative bets against the broader healthcare industry. Notably, Moderna maintained its status as the stock with the highest level of short interest within the sector during this period.

The healthcare sector, represented by the Health Care Select Sector SPDR® Fund ETF (NYSEARCA:XLV) and holding a weightage of 12.12% in the S&P 500 index, has slipped 1.73% year-to-date. This underperforms the broader S&P 500 index (SP500), which has risen 6.43% over the same period.

Stocks with the largest and least short positions

Ranked by short interest as a percentage of shares float

Moderna (NASDAQ:MRNA)—most shorted—with a short interest representing 19.15% of the float, down from 19.23% the prior month. This bearish sentiment aligns with Seeking Alpha’s Quant Rating of “Strong Sell,” which gives the mRNA therapeutics and vaccines developer a score of 1.44 out of 5.

“Moderna’s new COVID vaccine aims at a wider high-risk group, but the market is uncertain about potential revenue and ongoing losses. The company is shifting to cost-cutting, focusing on their pipeline, and providing realistic revenue forecasts after overspending on ambitious projects. If vaccination rates improve, there might be a 25%-40% increase in share price by 2025 ,” a Seeking Alpha analyst wrote.

In June, DaVita (NYSE:DVA) claimed the second spot for highest short interest at 8.47%, just ahead of ResMed (NYSE:RMD) at 6.96%.

On the other end, Johnson & Johnson (NYSE:JNJ) had the lowest short interest at 0.66%, followed by STERIS (NYSE:STE) at 0.84% and AbbVie (NYSE:ABBV) at 0.90%.

Industry Analysis

Average short interest as a percentage of floating shares

Biotechnology remained the most shorted industry within the healthcare index for the 15th straight month in June, with short interest unchanged at 2.95% since May. The healthcare equipment and supplies sector saw the second-highest short interest at 1.74%, up from 1.56% in May.

In contrast, the pharmaceuticals’ industry stood out with the lowest short interest among all healthcare sub-sectors in June, also flat at 1.72% from May.

Related ETFs: Health Care Select Sector SPDR Fund (NYSEARCA:XLV), SPDR S&P Pharmaceuticals ETF (NYSEARCA:XPH), VanEck Pharmaceutical ETF (NASDAQ:PPH), iShares Nasdaq Biotechnology ETF (NASDAQ:IBB), iShares U.S. Pharmaceuticals ETF (NYSEARCA:IHE), and Invesco Nasdaq Biotechnology ETF (NASDAQ:IBBQ).