VIVO tops small-cap utility shorts at 19.5% of float

At the other end of the spectrum, four utilities with market caps below $2 billion had short interest below 2%. The lowest was a municipal water utility in California, at 0.8% of float. That company benefits from a multi-year infrastructure contract that insulates revenue from weather swings.

The sector-wide short interest for the S&P 500 utilities index (XLU) rose to 2.3% of float in June, up from 2.1% in May. The concentration in small caps is notable. The five most-shorted small-cap utilities account for 38% of total short interest in the sector, even though they represent just 6% of market cap.

High short interest in small-cap utilities often signals skepticism about regulatory outcomes or earnings stability. VIVO's case is typical: the company has three rate cases pending across Texas and New Mexico, with decisions expected in the fourth quarter. If the rulings come in below the company's filed requests, the stock could face further pressure. If they exceed expectations, a short squeeze is possible. VIVO's days-to-cover stands at 8.4, the highest in the group.

The next short interest reporting date is July 12, covering the period through June 28. The data is compiled by S3 Partners and published by the exchange.