As the market continues to rise this month, hedge funds are betting against a handful of healthcare and auto stocks. The three major averages are poised to end February with notable gains, with the tech-heavy Nasdaq Composite leading the major indexes with a 5.8% advance. The S&P 500 rose 5% this month, while the Dow Jones Industrial Average advanced 2% and is on track for its first four-month winning streak since May 2021. But pockets of doubt remain, especially with some investors questioning it. How long can the AI-fueled rally in tech stocks last? CNBC Pro used FactSet data to look for stocks traded on the NYSE and NASDAQ with the shortest interest as of February 15. Each share has a market value of at least $100 million and a short interest of at least $25. Percentage outstanding, or number of outstanding shares available for trading. Here are some names of these heavily shorted stocks: Some healthcare stocks have seen a significant increase in short interest. Short interest rose 5.3% in vaccine maker Novavax during the first half of February, representing nearly half of the free float of the company's shares. Shares rose more than 12% on Thursday, rebounding a day after falling on disappointing fourth-quarter results. The drugmaker also said it expects full-year 2024 sales to be flat or lower compared to last year, especially as demand for Covid products continues to slow and more people get vaccinated at retail pharmacies. Biomea Fusion saw short interest increase by approximately 19% to 11.8 million shares, or about 43% of the float. Analysts remain optimistic, even as hedge funds bet against the stock. Truist began coverage of Biomea in early February, citing its potential as a blockbuster treatment in the multi-billion-dollar global diabetes market. The company set a price target of $55, suggesting an upside of approximately 197% from Wednesday's close. Traders also made big bets against retailers Children's Place, Revolve Group and newly public company Birkenstock. Children's Place saw short interest increase by more than 200% during the first half of February. The children's clothing retailer announced on Thursday that it has reached a new agreement with Saudi family investment firm and major shareholder Mithaq Capital to obtain new unsecured, interest-free financing worth $78.6 million, in addition to appointing four new directors to its board of directors. Shares are down about 16% year to date. Sandal Birkenstock, which beat expectations and reported a 22% year-over-year revenue jump on Thursday, saw short interest increase 2.4%, representing 6.6 million shares or roughly 27% of its float. Other short bets include electric car makers Fisker and Lucid Group, as well as used car dealer Carvana.
