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Host Hotels & Resorts (HST), Boston Properties (BXP) and Digital Realty Trust (DLR) ranked highly among the S&P 500 real estate stocks sold short as of Jan. 31, implying that investors are very pessimistic about these shares.
HST's short interest increased to 5.35% at January end from 5.19% as of Jan. 12, while BXP's short position came down to 4.17% from 4.39%. DLR's short position increased to 3.98% from 3.75%.
S&P 500 real estate stocks with significant increases in short interest as of Jan. 31 were Kimco Realty (KIM), Vici Properties (NYSE:VICI) and UDR (UDR). The stocks with notable reductions in short positions were Realty Income (NYSE:O), Iron Mountain (NYSE:IRM) and Mid-America Apartment Communities (MAA).
Here is a look at the short positions of select real estate stocks:
At the end of last month, the real estate in whole saw a decline in short positions compared to mid-January, implying that investors are getting optimistic about the sector. Short interest on the sector ticked down by 4 basis points to 2.03% from 2.07%.
The Real Estate Select Sector SPDR Fund ETF (NYSEARCA:XLRE) was down ~4% between the middle of January and the end of the month. Meanwhile, the broader S&P 500 index gained ~1.4% during that time frame.
Seeking Alpha analysts rate XLRE as a Buy, while the Quant Rating system grades it as a Sell.
REITs should perform well in 2024 after a challenging 2023 as the Federal Reserve is set to cut rates this year. The Real Estate Select Sector SPDR Fund ETF is a way to gain exposure to the REIT sector, according to SA author MacroGirl.
Short interest by subsectors:
Hotel & Resort continued to be the most shorted among the S&P 500 real estate subsectors, considering that its sole stock HST is in the top among the most shorted real estate stocks.
Short interest on Office REITs remained unchanged as of Jan. 31 at 3.45%.
Residential and Specialized subsectors saw an increase in short positions at the end of last month.
Here is a look at short positions across real estate subsectors: