US retailers top Markit’s most shorted
31 March 2015 London
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Markit has compiled a review of how short sellers are positioning themselves in companies due to announce results in the near future.
North American retailers represent a fifth of the most shorted companies about to release earnings. Leading the pack is furniture retailer Conn’s with 14 percent of its shares outstanding on loan, although this is down from the highs of 22 percent seen in 2014.
Second hand car retailer Carmax has also sent short sellers covering in 2015, according to Markit.
Sales for the year ending February 2015 are forecast by analysts to be higher while operating profit is expected to almost double.
Two US biotech stocks also make the list after having seen a significant increase in short interest in the February ahead of earnings.
Short sellers have increased positions in Kite Pharma and Celladon Corp by 55 percent and 183 percent to 11 percent and 4.8 percent of shares outstanding, respectively.
Across the Atlantic, retailers are also high on the list of short targets with UK based internet retailer Asos the most shorted stock ahead of earnings.
Shares outstanding on loan have climbed from 1.2 percent to 11.2 percent in the last 12 months as short sellers continued to build out positions.
Analyst at Markit, Relte Schutte, commented: “Asos reported sales growth and margins that were below expectations during 2014 after a robust 2013 period in which shares rallied strongly.”
“After experiencing lagging international sales and industry headwinds in 2014, investor sentiment has turned sour. The shares have bounced back 48 percent this year to date and short sellers have covered positions by 17 percent.”
The second most shorted stock in Europe on Markit’s list, Rib Software, provides solutions to the construction industry.
Shares outstanding on loan have increased by 22 percent in February reaching 7.7 percent. Consensus forecasts expect 2015 earnings to fall, despite higher sales forecast.
The most shorted stock in Asia is newly-listed China Vanke, the largest real estate developer in China by market value. Short interest in the company currently stands at 20 percent of shares out on loan.
Schutte said: “Property sales, selling prices and accordingly volumes have been weaker in China since early 2014 and developers have been heavily discounting to offload stock, adding to concerns of a continued slowdown in the Chinese housing market.”
The second most shorted stock in the region is also the second largest real estate developer in China, Evergrande Real Estate Group. The amount of shares out on loan has decreased by 15 percent since October 2014 while the share price has climbed by 22 percent.
North American retailers represent a fifth of the most shorted companies about to release earnings. Leading the pack is furniture retailer Conn’s with 14 percent of its shares outstanding on loan, although this is down from the highs of 22 percent seen in 2014.
Second hand car retailer Carmax has also sent short sellers covering in 2015, according to Markit.
Sales for the year ending February 2015 are forecast by analysts to be higher while operating profit is expected to almost double.
Two US biotech stocks also make the list after having seen a significant increase in short interest in the February ahead of earnings.
Short sellers have increased positions in Kite Pharma and Celladon Corp by 55 percent and 183 percent to 11 percent and 4.8 percent of shares outstanding, respectively.
Across the Atlantic, retailers are also high on the list of short targets with UK based internet retailer Asos the most shorted stock ahead of earnings.
Shares outstanding on loan have climbed from 1.2 percent to 11.2 percent in the last 12 months as short sellers continued to build out positions.
Analyst at Markit, Relte Schutte, commented: “Asos reported sales growth and margins that were below expectations during 2014 after a robust 2013 period in which shares rallied strongly.”
“After experiencing lagging international sales and industry headwinds in 2014, investor sentiment has turned sour. The shares have bounced back 48 percent this year to date and short sellers have covered positions by 17 percent.”
The second most shorted stock in Europe on Markit’s list, Rib Software, provides solutions to the construction industry.
Shares outstanding on loan have increased by 22 percent in February reaching 7.7 percent. Consensus forecasts expect 2015 earnings to fall, despite higher sales forecast.
The most shorted stock in Asia is newly-listed China Vanke, the largest real estate developer in China by market value. Short interest in the company currently stands at 20 percent of shares out on loan.
Schutte said: “Property sales, selling prices and accordingly volumes have been weaker in China since early 2014 and developers have been heavily discounting to offload stock, adding to concerns of a continued slowdown in the Chinese housing market.”
The second most shorted stock in the region is also the second largest real estate developer in China, Evergrande Real Estate Group. The amount of shares out on loan has decreased by 15 percent since October 2014 while the share price has climbed by 22 percent.
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