Solid week for software firms
29 October 2014 London
Image: Shutterstock
Software firms have seen significant demand to borrow in the run up to Q3 earnings results, according to research from Markit.
Castlight Health, which serves the enterprise healthcare software market via the cloud to employers, is the most shorted company in the US. The company is trading 72 percent lower from its initial public offering in March, which peaked at $40.
Currently trading at $11.20, 49 percent of its shares are out on loan. Analysts at Markit have questioned the company's ability to convert reported backlog orders and to aggressively grow revenue figures.
Other highly shorted stocks in the US include iron ore producer Cliffs Natural Resources, which is trading 63 percent down over the past year and currently has 34 percent of its shares out on loan.
Simon Colvin, research analyst at Markit, commented: “Iron ore prices continue to face pressure from subdued demand expectations coming out of China and increased supply due to come on line during the course of the year.”
Weak growth has been a recent theme in Europe, according to Markit, with several capital goods firms featuring prominently among the 18 firms seeing over than 4 percent of shares out on loan ahead of earnings.
Capital goods firms seeing the most of their stocks shorted include Yit in Finland with 13.9 percent of shares out on loan, Outotec with 9.4 percent and Vossloh with 6.3 percent.
The most shorted company soon to announce earnings is Finnish tyre manufacturer Nokian Tyres, which has just under 16 percent of its shares out on loan.
The company has a heavy exposure to the Russian market and the devaluating rouble, combined with the threat of recession in its biggest market, which has seen shorts double their positions in the firm from the start of the year.
In Asia, tech firms dominate the most shorted sector, with software, component and hardware firms all featuring within the 14 firms with a high 8 percent or more of their shares out on loan ahead of earnings.
Tablet manufacturer Wacom has 13.2 percent of its shares out on loan after its share price fell by 46 percent since the start of the 2014 following weak demand for tablets. This has impacted both its branded equipment and component businesses.
Colvin said: “The company missed earnings expectations last time around and shorts don’t look to have much high hopes for its coming results; a sentiment that has been mirrored across the sector.”
Also joining Wacom among heavily shorted firms are computer manufacturers Casio and Acer, with 13 and 9.3 percent of shares out on loan, respectively.
Markit has identified 20 firms with more than 20 percent of shares out on loan prior to the announcement of Q3 earnings.
Castlight Health, which serves the enterprise healthcare software market via the cloud to employers, is the most shorted company in the US. The company is trading 72 percent lower from its initial public offering in March, which peaked at $40.
Currently trading at $11.20, 49 percent of its shares are out on loan. Analysts at Markit have questioned the company's ability to convert reported backlog orders and to aggressively grow revenue figures.
Other highly shorted stocks in the US include iron ore producer Cliffs Natural Resources, which is trading 63 percent down over the past year and currently has 34 percent of its shares out on loan.
Simon Colvin, research analyst at Markit, commented: “Iron ore prices continue to face pressure from subdued demand expectations coming out of China and increased supply due to come on line during the course of the year.”
Weak growth has been a recent theme in Europe, according to Markit, with several capital goods firms featuring prominently among the 18 firms seeing over than 4 percent of shares out on loan ahead of earnings.
Capital goods firms seeing the most of their stocks shorted include Yit in Finland with 13.9 percent of shares out on loan, Outotec with 9.4 percent and Vossloh with 6.3 percent.
The most shorted company soon to announce earnings is Finnish tyre manufacturer Nokian Tyres, which has just under 16 percent of its shares out on loan.
The company has a heavy exposure to the Russian market and the devaluating rouble, combined with the threat of recession in its biggest market, which has seen shorts double their positions in the firm from the start of the year.
In Asia, tech firms dominate the most shorted sector, with software, component and hardware firms all featuring within the 14 firms with a high 8 percent or more of their shares out on loan ahead of earnings.
Tablet manufacturer Wacom has 13.2 percent of its shares out on loan after its share price fell by 46 percent since the start of the 2014 following weak demand for tablets. This has impacted both its branded equipment and component businesses.
Colvin said: “The company missed earnings expectations last time around and shorts don’t look to have much high hopes for its coming results; a sentiment that has been mirrored across the sector.”
Also joining Wacom among heavily shorted firms are computer manufacturers Casio and Acer, with 13 and 9.3 percent of shares out on loan, respectively.
Markit has identified 20 firms with more than 20 percent of shares out on loan prior to the announcement of Q3 earnings.
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