Short interest in US healthcare stocks falls to lowest level in more than a year

Short sellers steadily reduced their bets against healthcare stocks in 2022, ending November with the lowest level of short interest in the sector in more than a year.

Short interest, which measures the percentage of outstanding shares held by short sellers, in U.S. healthcare stocks ended November at 3.81%, its lowest point since October 2021, according to the latest S&P Global Market Intelligence data. Short interest in the healthcare sector has fallen 210 basis points since its peak in June 2020.

Healthcare stocks have outperformed the broader market this year. The S&P 500 healthcare sector is down less than 5% year-to-date compared to the near-20% drop in the larger index.

S&P 500

Short interest in the S&P 500 averaged 2.27% at the end of November, down from 2.33% a month earlier.

Healthcare was the second-most-shorted sector, with consumer discretionary remaining the most shorted at 4.88% short interest as of the end of November. Energy was the third-most-shorted sector with 3.63% short interest.

Most-shorted healthcare industries

At the end of November, short sellers betting against healthcare stocks focused on the biotechnology industry, which had 4.11% short interest. Healthcare distributors, healthcare supplies, and pharmaceuticals industries drew the second-, third- and fourth-most short interest, respectively.

Most-shorted healthcare company

Novavax Inc., which had 30% short interest, was the most-shorted healthcare company at the end of November. Editas Medicine Inc., Palisade Bio Inc. and Tricida Inc. followed with 29.2%, 27.8% and 24.1% short interest, respectively.