The 5 Most Shorted Stocks in the S&P 500

May's right around the corner and bears are piling on bets against the most shorted stocks - and the overall market - in preparation for the expected annual sell-off.

During the first two weeks of April, almost 60% of stocks in the Standard & Poor's 500 Index saw an increase in short interest, and the Nasdaq had an overall increase in short positions as well.

Right now, the most shorted stocks include a struggling retailer, a for-profit college and an alternative energy company - and one stock that's up a whopping 131% in 2013.

But don't be misled into going against the grain. These stocks are not "buys."

Rather, investors should steer clear of these risky stocks.

5 Most Shorted Stocks

This list of most shorted stocks in the S&P 500 is made up of companies with the highest percentage of outstanding shares sold short.

Here they are:

J.C. Penney Co. Inc. (NYSE: JCP): Is it any surprise J.C. Penney tops the list of most shorted stocks, with a short interest of 47.4%? The battered retailer has lost 61% from its 2012 high, and not even the news that George Soros has taken a stake in the company will help it survive much longer. Penney is not the only retailer struggling. It joins these companies among big-box retailers that could soon become extinct.

GameStop Corp: (NYSE: GME): After a 54% increase in its stock over the past year, investors are increasingly skeptical that the video game retailer can keep up the success. Even though the company gave a strong outlook for 2013 when it reported 2012 earnings last month, the fact is GameStop lost almost $270 million last year. That's certainly not inspiring, and its short interest now sits at 38.1%.

First Solar Inc. (Nasdaq: FSLR): At the end of 2012, First Solar stock was down 82% from its 2011 peak near $170. But on April 9, the company said it expects earnings and revenue for the next three years to be well above analysts' estimates, and its stock surged 45%. After the initial short squeeze, bears scrambled to once again short the stock, sending the short interest to where it currently stands at 30.4%, up from 20% just a few weeks earlier. Watch its first-quarter earnings Tuesday, April 29, to see if the bears are finally right, or in for another squeeze.

Apollo Group Inc. (Nasdaq: APOL): One of the worst stocks of 2012, Apollo continues to get no love from Wall Street. After falling 62% in 2012, the University of Phoenix operator is down another 14% this year. Expectations for Apollo are still bleak, as its stock has a short interest of 20% and the company plans to close more than 115 of its smaller campuses in the next few years.

Netflix Inc. (Nasdaq: NFLX): Even though Netflix is the 15th most shorted stock on the S&P 500, it might be the best one to short, especially after its latest earnings boost. When Netflix reported first-quarter earnings April 22, its stock surged 25%, making its P/E 741. Further, NFLX is up 306% from its 52-week low, hit just last October. This has been a volatile stock the past few years. It's gone from the $50s to almost $300 then back to the $50s, before making its latest run to $215, which is why investors should avoid Netflix - or short it, if they're bold enough.

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