The S&P/TSX Composite Index dropped 228 points on Tuesday, May 30. Every major sector on the TSX suffered a drop on the same day. Moreover, futures for major North American indexes are currently in the red. Today, I want to zero-in on two of the most shorted stocks on the TSX right now. Should you look to bail on these equities as we move into the month of June? Let’s jump in.
Shopify (TSX:SHOP)(NYSE:SHOP) is an Ottawa-based commerce company that provides a platform and services in Canada, the United States, and around the world. Shares of this top tech stock have climbed 23% month-over-month as of close on May 30. Shopify stock has surged 62% so far in 2023.
In its first quarter fiscal 2023 report, Shopify announced a round of significant layoffs. This commitment to cost cutting appeared to bolster investor sentiment in the near term. Shopify has experienced the second largest short interest in Canada over the past month. Short sellers are hanging tough, and Shopify’s valuation is again becoming a concern.
Suncor Energy (TSX:SU)(NYSE:SU) is a Calgary-based integrated energy company that operates in Canada and around the world. Its shares have dropped 7.1% month over month. That has pushed the stock into negative territory in the year-to-date period.
This top TSX stock has generated significant interest over the past month, eclipsed only by five other heavily shorted equities. I’m going against the short sellers with Suncor as the stock offers nice value and a strong dividend right now. It looks undervalued as we look to close the book on May 2023.
