A familiar fundamental catalyst could again boost TAN: Short covering. Two TAN holdings – SolarCity and GT Advanced Technologies (NasdaqGS: GTAT) – currently rank among the most shorted stocks on Wall Street with short interests of 29.2% and 34.3%, respectively, according to Business Insider. Those stocks combine for 12.6% of TAN’s weight. [Solar ETF’s Secret Sauce]
Additionally, solar sector short interest is on the rise. Recent NASDAQ data indicate SunEdison’s (NYSE: SUNE) short interest has jumped to 25.6% while SunPower’s (NasdaqGS: SPWR) has climbed to 26.3%, according to 24/7 Wall Street.
First Solar’s (NasdaqGS: FSLR) short interest is up to 15.3% of the company’s float. First Solar, SunEdison and SunPower combine for over 21% of TAN’s weight.
Heavily shorted holdings can actually work in TAN’s favor. As the Wall Street Journal recently reported, a well-oiled securities lending operation has enabled TAN to outperform its underlying index by an average of 3.6% per year. With demand rising to short TAN’s holdings, those securities lending fees collected by the issuer could again work in favor of investors that are long the ETF.
Guggenheim Solar ETF
