Citi Short Interest Drops; Regions Booms

Shorts bailed out ahead of several bullish analyst reports.
By Dan Freed ,

NEW YORK (

TheStreet

) --

Citigroup

(C) - Get Report

short interest fell 23% in the second half of November, the latest sign that bullish sentiment is increasing around the banking giant.

Outstanding short interest in Citigroup fell to nearly 294 million from almost 381 million shares in the middle of the month. Short interest in other banks was mixed, with

Bank of America

(BAC) - Get Report

up slightly to 114 million from 111 million shares, and

Wells Fargo

(WFC) - Get Report

short interest dropping to 54 million from 57 million during the earlier period.

Regions Financial

(RF) - Get Report

, meanwhile, saw a roughly 50% jump in short interest to nearly 66 million from just under 44 million in the first half of November.

Short sellers borrow a company's shares in the hope they will drop in price. They can then buy them at the lower price to return the shares to the lender, while pocketing the difference. The New York Stock Exchange reports its 100 most-shorted tickers twice a month with several days lag time.

Short sellers appear to have made the right bet on Citigroup, as the bank has outperformed peers like Bank of America, Wells Fargo,

JPMorgan Chase

(JPM) - Get Report

,

Goldman Sachs

(GS) - Get Report

and

Morgan Stanley

(MS) - Get Report

over the last month, showing particular momentum this month after dipping slightly in the find days of November.

Citigroup has been aided in its recent days by some bullish research calls. Oppenheimer, Deutsche Bank and Goldman all reiterated bullish views, while ISI Group upgraded Citi to "buy" from "hold," arguing investors will see "substantial return of capital" beginning in 2012, according to

Dow Jones

.

--

Written by Dan Freed in New York

.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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