Short bets on S&P 500 Healthcare sector ease in May; MRNA stays most shorted stock

The negative sentiment towards the S&P 500 Health Care Index Sector (NYSEARCA:XLV) softened in May as average short interest dipped to 1.90% from 1.95% in April. Moderna (NASDAQ:MRNA), however, notably retained its position as the sector’s most heavily shorted stock.

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 0.55% year-to-date. This underperforms the broader S&P 500 index (SP500), which has risen 2.78% 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 19.23% of the float, up from 17.58% 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 1.19 out of 5. The COVID vaccine maker has shed over a third of its value this year, following reduced COVID-19 vaccine sales, and the recent withdrawal of its flu/COVID vaccine candidate, and a $700 million funding loss for its human bird flu vaccine development.

In May, DaVita (NYSE:DVA) claimed the second spot for highest short interest at 8.14%, just ahead of Henry Schein (NASDAQ:HSIC) at 7.52%.

On the other end, Medtronic (NYSE:MDT) had the lowest short interest at 0.62%, followed by Johnson & Johnson (NYSE:JNJ) at 0.80% 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 14th straight month in May, with short interest slightly increasing to 2.95% from April’s 2.93%. The healthcare equipment and supplies sector saw the second-highest short interest at 1.56%.

In contrast, the pharmaceuticals industry had the lowest short interest among healthcare sub-sectors in May, at 1.72%.

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).