Hedge funds short New Year's resolutions 18 January 2012London Reporter: Anna Reitman
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Short sellers are staying put in the shares with high self improvement exposure, despite a New Year’s rally in their share price, writes Data Explorers.
Short interest on sporting goods retailers and businesses focused on weight loss is high: Sector heavyweight Weight Watchers saw its share price increase by a quarter in January alone off the back of a ‘resolution’ rally. Short sellers are not as bullish, increasing their bets 50 per cent to 8 per cent of the total shares in the last month, according to Data Explorers securities lending flow data.
Meanwhile, tobacco producers have low interest but so do pharmaceuticals producing smoking cessation products.
"[Short sellers] have been most active in companies exposed to weigh loss commitments. This is perhaps owing to the fact that quitting smoking is a much less transient undertaking than losing a few pounds gained over the holiday season," notes Data Explorers.
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