Energy and Technology stocks shorted ahead of earnings

As the earnings season rumbles on against a backdrop of plunging share prices and macro economic uncertainty, we have created a screen which highlights that stocks within the Energy and Technology sectors currently see the greatest short interest amongst those US companies reporting earnings this week. Standout names include Northern Oil and Gas (AMEX:NOG), ATP Oil and Gas (NASDAQ:ATPG), Sunpower Corp. (NASDAQ:SPWRA), AOL, Inc. (NYSE:AOL) and EBIX, Inc. (NASDAQ:EBIX).

Energy stocks

Northern Oil and Gas, Inc. (AMEX:NOG) is expected to report earnings on Monday. The company has missed earnings estimates for the last four quarters and caught the attention of short sellers in March when the share price reached new annual highs. As the shares fell over the second quarter, short interest peaked at 40% of the company, before settling at a considerable 35% of the total shares. The company has consistently featured in our screen of stocks reaching new annual short interest highs, yet institutional investors who lend continue to have faith. They have increased holdings by 80% in 2011, to an annual high of 18 million shares.

Similar to other U.S. energy stocks, ATP Oil and Gas Corp. (NASDAQ:ATPG) is subject to heavy short interest. This peaked in April at 33% of the total shares, with three-quarters of the lendable supply out on loan. Since then, the share price fell to new annual lows which prompted short covering activity. Short interest has declined to 24% of the company - its lowest level in 2011. That said, the stock does have convertible bonds in issue, which gives rise to an arbitrage that inflates demand to borrow the shares. Institutional investors have recently turned bearish towards this stock as their total holdings have reduced by almost a fifth.

In the renewable energy sector, SunPower Corp. (NASDAQ:SPWRA) is due to report earnings on Tuesday. Although this stock has seen volatility in its share price, it has witnessed an upwards trend over the year that may have prompted short sellers into action. Short interest reached an annual high of 40% of the total shares at the end of April. Following this, there was a period of sharp short covering, reducing short interest to 15% - the lowest level since February 2009. Meanwhile, institutional investors have halved their holdings to 10 million shares since late April.

Technology stocks

AOL, Inc. (NYSE:AOL) has been regularly highlighted in our screen of stocks reaching a new annual high in short interest. Since March, demand to borrow the stock has surged from 2% to record highs of 20% of the total shares as the share price has plummeted to unprecedented lows. Institutional investors who lend held steady until recently, but reduced their holdings by 5 million shares over the past two months.

EBIX, Inc. (NASDAQ:EBIX) supplies software and e-commerce solutions to the insurance industry. Its share price has tumbled since the start of the second quarter to new annual lows. Meanwhile short sellers have rushed to borrow this stock, causing short interest to jump from 17% to an annual high of 34% of the company. With over 80% of the shares that can be borrowed currently out on loan, this stock is likely to be expensive and difficult to borrow.