Short bets on S&P 500 consumer staples saw a surge in June

The short interest on 13 out of 38 consumer staple stocks—part of the Consumer Staples Select Sector SPDR Fund (NYSEARCA:XLP)—dropped in June vs. the previous month, while short interest for 1 stock was flat. The remaining 24 stocks saw a rise in their short interest.

Short bets fell for 6 out of 13 industries in the consumer staples sector. However, the average grand total short interest increased to 2.20% in June from 2.05% in May for defensives.

Industry Analysis:

In the consumer defensive/staples sector, Distillers and Vintners remained the most shorted industry, with an average short interest of 7.96% vs. the previous month’s 7.55%.

Brewers were the second-most shorted industry and had the second-highest short interest of 7.73% in June, vs. 7.05% last month.

Short interest in Household Products segment was lowest at 1.26% vs. 1.19% prior. Followed by the Soft Drinks and Non-alcoholic Beverages segment that was the second-lowest segment, with a short interest of 1.34% vs. 1.13%.

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:

• Procter & Gamble (NYSE:PG): 0.67% vs. 0.75% last month
• Philip Morris International (NYSE:PM): 0.74% vs. 0.72%
• Coca-Cola (NYSE:KO): 0.83% vs. 0.75%
• Walmart (NYSE:WMT): 0.84% vs. 0.95%
• Costco Wholesale (NASDAQ:COST): 1.28% vs. 1.23%

Most shorted stocks:

• Campbell Soup (NASDAQ:CPB): 11.95% vs. 9.72%
• Brown-Forman (NYSE:BF.B): 9.79% vs. 9.78%
• Molson Coors Beverage (NYSE:TAP): 7.73% vs. 7.05%
• Dollar Tree (NASDAQ:DLTR): 6.92% vs. 6.51%
• Hershey Foods (NYSE:HSY): 6.69% vs. 5.81%

The S&P 500’s consumer staples sector ETF (NYSEARCA:XLP) lost 2.3% in June, compared to broader S&P 500 ETF Trust (NYSEARCA:SPY) gain of 4.53%.

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