In this update on the short selling of shares in Canadian public companies, we report on:
- Largest short positions
- Largest increases in short positions
- Largest short positions for exchange-traded funds (ETFs)
- Short squeeze candidates
- Stock recommendations from Veritas Investment Research
- Study: does short selling inhibit corporate green transformations?
- End note on data sources.
Largest short positions
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Telus Corp. and BCE Inc. are among the most shorted large-cap companies. “There is no doubt that the entire Canadian telecom sector is under pressure from lower immigration and competition,” writes Veritas Investment Research analyst Liam Gallagher in a recent note. Furthermore, both companies have dividend payout ratios considerably above 100 per cent and BCE’s “capital allocation strategy . . . has not been exemplary,” adds Mr. Gallagher.
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Largest increases in short positions
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Largest short positions for exchange-traded funds (ETFs)
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Short squeeze candidates
While short positions tend to warn of underperformance in a stock, short sellers can unintentionally push stock prices higher if they rush to buy back the shares they borrowed. Such panic buying can be triggered by mounting losses, higher borrowing costs and other factors. Data source S3 Partners combined these factors into an algorithm, called the Short Squeeze Score, to rank companies by the likelihood of a short squeeze — with 100 being the highest probability and 0 being the lowest.
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Stock recommendations from Veritas Investment Research
Toronto-based Veritas Investment Research is an independent investment firm. Because they do not receive revenues from investment banking or trading, they can provide unconflicted investment advice on stocks. Let’s highlight their recent sell rankings (views may have changed since they were issued):
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Veritas has also issued a “buy” recommendation on Canada Goose Holdings (GOOS-T) due in part to a cheap valuation. Its stock is one of the most likely to experience a short squeeze.
Does short selling inhibit corporate green transformations?
In a study (Does short selling affect corporate green transformation?) to be published in the April 2025 edition of Research in International Business and Finance, Deshuai Hou and three other academics take issue with studies that find short sellers constrain corporate pollution behavior, concluding instead that short selling “hinders corporate green transformation.”
End note on data sources
S3 Partners was the main source for short-sales data. It was selected because Canada has many companies interlisted in the United States and other exchanges, and S3 Partners sums short positions (currency-adjusted) across both countries. Other data sources for short sales data don’t do this. A cutoff was applied to exclude companies whose short positions were miniscule in dollar value. Note that short positions, regardless of data source, may not be purely bearish bets because of trades made for hedging or arbitrage reasons.
Larry MacDonald is a regular contributor to the Globe and Mail, and author of several business books, the latest being The Shopify Story