Top of the hot stocks: Royal Mail, SONOS and Meituan Dianping
04 October 2018 London
Image: Shutterstock
Royal Mail has topped the FIS Astec Analytics hot stocks list for Europe, the Middle East, and Africa (EMEA) last week (ending 28 September).
According to FIS, the UK-based postal service provider has been the target of recent criticism around the “golden hello” provided to the incoming CEO, while profits are falling along with capital expenditure on new technology, desperately required to modernise the labour-intensive service.
However, the company is indicating it will retain its generous dividend policy. Between the 12-month peak in July and mid-September, 58 percent of short interest positions had been closed.
FIS noted that volume has since grown sharply, adding back 43 percent by last week’s close, suggesting a rising expectation that the share price, closing last week at £4.77, will come under pressure unless Royal Mail finds a way to deliver.
Following Royal Mail was RIB Software, the Germany-based provider of resource planning software.
RIB Software has been absent from the hot stocks list since May when short interest volume hit a 12-month low. The company is back this week, however, as short interest volume hits 12-month highs.
Since the start of June, FIS explained that short sellers have once again been on a charge, pushing volume upward by some 115 percent by last week’s close, forcing utilisation up to 48 percent, a 172 percent advance over the same time period, suggesting a contraction in supply as long-suffering investors sell out of RIB.
Topping the Americas hot stocks list was SONOS, the US-based consumer electronics provider.
Having come to the market via an initial public offering (IPO) in August at $15 apiece, its shares closed the prior week at $13.24, but have since recovered a little to close last week at $16.04.
Short sellers seem unperturbed, however, adding 16 percent by volume to their positions, keeping utilisation at the maximum 100 percent all week.
The ongoing demand also pushed the borrowing costs upward, almost ten-fold, providing the third and final component of a classic short squeeze.
According to FIS, longer term, the threat from Amazon, who is committed to dominating the smart/home speaker space, remains credible, and the short sellers may yet win through, assuming they survive these painful days.
Tilray retained its number one spot in the Americas list as short interest volume continues to advance.
Last week saw volume grow 53 percent, pushing utilisation from 89 to the maximum 100 percent, a net gain of around 12 percent.
FIS suggested that with volume growing much more quickly, pushing the supply side of the market to the limit, suggests a strong expectation that Tilray remains overvalued, despite the shares themselves gaining some $20.62, or 17 percent, to close last week at $143.62.
Topping the Asia Pacific hot stocks list, and making its debut, is Meituan Dianping, a China-based e-commerce platform delivering a range of services to its client base.
Coming to the market on 20 September, through a listing in Hong Kong, just one week ago, short sellers have jumped aboard, multiplying their positions 56-fold over the last seven days.
This pushed utilisation up to just over 22 percent, which FIS said is low compared to some IPO launches, but is enough to show conviction.
So far, short sellers are ahead, given that the company launched at HK$69 and was met with strong demand, FIS noted that some may have been surprised to see the shares end their first week at HK$68.75, having peaked at HK$74 on their second day.
BYD also keeps its top spot for the third week in a row as long investors extend their buying spree.
The company share price gained almost 3 percent as investors continue to see the low prices as a buying opportunity.
Short sellers also continued to expand their positions, growing volume by over 4 percent over the last week, pushing utilisation to grow half as fast as supply also increased.
With utilisation closing the week at 56 percent, FIS explained that the short side of the market is continuing to build up their positions in the expectation that the recent bounce in the share price will not be sustained.
According to FIS, the UK-based postal service provider has been the target of recent criticism around the “golden hello” provided to the incoming CEO, while profits are falling along with capital expenditure on new technology, desperately required to modernise the labour-intensive service.
However, the company is indicating it will retain its generous dividend policy. Between the 12-month peak in July and mid-September, 58 percent of short interest positions had been closed.
FIS noted that volume has since grown sharply, adding back 43 percent by last week’s close, suggesting a rising expectation that the share price, closing last week at £4.77, will come under pressure unless Royal Mail finds a way to deliver.
Following Royal Mail was RIB Software, the Germany-based provider of resource planning software.
RIB Software has been absent from the hot stocks list since May when short interest volume hit a 12-month low. The company is back this week, however, as short interest volume hits 12-month highs.
Since the start of June, FIS explained that short sellers have once again been on a charge, pushing volume upward by some 115 percent by last week’s close, forcing utilisation up to 48 percent, a 172 percent advance over the same time period, suggesting a contraction in supply as long-suffering investors sell out of RIB.
Topping the Americas hot stocks list was SONOS, the US-based consumer electronics provider.
Having come to the market via an initial public offering (IPO) in August at $15 apiece, its shares closed the prior week at $13.24, but have since recovered a little to close last week at $16.04.
Short sellers seem unperturbed, however, adding 16 percent by volume to their positions, keeping utilisation at the maximum 100 percent all week.
The ongoing demand also pushed the borrowing costs upward, almost ten-fold, providing the third and final component of a classic short squeeze.
According to FIS, longer term, the threat from Amazon, who is committed to dominating the smart/home speaker space, remains credible, and the short sellers may yet win through, assuming they survive these painful days.
Tilray retained its number one spot in the Americas list as short interest volume continues to advance.
Last week saw volume grow 53 percent, pushing utilisation from 89 to the maximum 100 percent, a net gain of around 12 percent.
FIS suggested that with volume growing much more quickly, pushing the supply side of the market to the limit, suggests a strong expectation that Tilray remains overvalued, despite the shares themselves gaining some $20.62, or 17 percent, to close last week at $143.62.
Topping the Asia Pacific hot stocks list, and making its debut, is Meituan Dianping, a China-based e-commerce platform delivering a range of services to its client base.
Coming to the market on 20 September, through a listing in Hong Kong, just one week ago, short sellers have jumped aboard, multiplying their positions 56-fold over the last seven days.
This pushed utilisation up to just over 22 percent, which FIS said is low compared to some IPO launches, but is enough to show conviction.
So far, short sellers are ahead, given that the company launched at HK$69 and was met with strong demand, FIS noted that some may have been surprised to see the shares end their first week at HK$68.75, having peaked at HK$74 on their second day.
BYD also keeps its top spot for the third week in a row as long investors extend their buying spree.
The company share price gained almost 3 percent as investors continue to see the low prices as a buying opportunity.
Short sellers also continued to expand their positions, growing volume by over 4 percent over the last week, pushing utilisation to grow half as fast as supply also increased.
With utilisation closing the week at 56 percent, FIS explained that the short side of the market is continuing to build up their positions in the expectation that the recent bounce in the share price will not be sustained.
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