Retailers seeing increased short interest
20 November 2014 London
Image: Shutterstock
A number of speciality retailers have high levels of short interest ahead of earnings results following positive US sales numbers, according to Markit.
Retail sales in the US picked up 0.3 percent in October (a 4.1 percent increase year-on-year) after a decline of the same amount was reported in October, which sent fears of a subdued festive trading season into the equity markets.
Gamestop, the online gaming retailer, has 29 percent of shares outstanding on loan and the company鈥檚 shares are down 10 percent year-to-date.
According to market, this may be due to the market continuing to take a negative view on the evolution of online console and game sales amid increased competition and digital distribution.
Analyst at Markit, Relte Schutte, commented: 鈥淐onsole makers are going straight to digital release with new titles and consumers are changing their buying habits.鈥�
鈥淎dditionally, as reported earlier in the year, Gamestop鈥檚 refurbished console business does quite well over holiday periods. However, the increase in digital release and uptake has eroded the primary market for second hand sales.鈥�
Beyond retailers, short interest in solar energy company Jinkosolar has increased by 5 percent to 16.4 percent of shares outstanding and Ja Solar has also seen significant short interest with 11.5 percent.
Solar and renewable energy firms have come under pressure as energy prices globally have declined and the short-term viability of projects comes into question at reduced prices.
The largest short in the European market at the moment, according to Markit, is Dutch technical services company Royal Imtech, who had to revise accounts post fraudulent activity in Germany and Poland.
The company recently executed a rights offer with that received low demand from investors. The offer was fully underwritten by Dutch banks Rabobank, ABN Amro and ING, who now own 47 percent of the firm.
A notable stock also announcing earnings is the UK鈥檚 Majestic Wine whose shares have fallen by 32 percent year-to-date, with 5.7 percent of shares outstanding on loan ahead of earnings.
The wine retailer reported marginally contracting sales in June after worse than expected sales in March caused by a surprise slowdown in post Christmas sales.
The most shorted stock in Asia ahead of earnings is Micronics Japan with 8 percent of shares outstanding on loan.
The company is involved in the design and manufacture of probe cards that inspect semiconductors and LCD displays.
According to Markit, the share price is flat year-to-date but is trading at five-year highs.
Second most shorted in Asia is communication and telecommunication manufacturer Hitron Technologies, with 7.1 percent of shares outstanding on loan, a number that has increased at 鈥渁 steady pace throughout the year鈥� according to Schutte.
Retail sales in the US picked up 0.3 percent in October (a 4.1 percent increase year-on-year) after a decline of the same amount was reported in October, which sent fears of a subdued festive trading season into the equity markets.
Gamestop, the online gaming retailer, has 29 percent of shares outstanding on loan and the company鈥檚 shares are down 10 percent year-to-date.
According to market, this may be due to the market continuing to take a negative view on the evolution of online console and game sales amid increased competition and digital distribution.
Analyst at Markit, Relte Schutte, commented: 鈥淐onsole makers are going straight to digital release with new titles and consumers are changing their buying habits.鈥�
鈥淎dditionally, as reported earlier in the year, Gamestop鈥檚 refurbished console business does quite well over holiday periods. However, the increase in digital release and uptake has eroded the primary market for second hand sales.鈥�
Beyond retailers, short interest in solar energy company Jinkosolar has increased by 5 percent to 16.4 percent of shares outstanding and Ja Solar has also seen significant short interest with 11.5 percent.
Solar and renewable energy firms have come under pressure as energy prices globally have declined and the short-term viability of projects comes into question at reduced prices.
The largest short in the European market at the moment, according to Markit, is Dutch technical services company Royal Imtech, who had to revise accounts post fraudulent activity in Germany and Poland.
The company recently executed a rights offer with that received low demand from investors. The offer was fully underwritten by Dutch banks Rabobank, ABN Amro and ING, who now own 47 percent of the firm.
A notable stock also announcing earnings is the UK鈥檚 Majestic Wine whose shares have fallen by 32 percent year-to-date, with 5.7 percent of shares outstanding on loan ahead of earnings.
The wine retailer reported marginally contracting sales in June after worse than expected sales in March caused by a surprise slowdown in post Christmas sales.
The most shorted stock in Asia ahead of earnings is Micronics Japan with 8 percent of shares outstanding on loan.
The company is involved in the design and manufacture of probe cards that inspect semiconductors and LCD displays.
According to Markit, the share price is flat year-to-date but is trading at five-year highs.
Second most shorted in Asia is communication and telecommunication manufacturer Hitron Technologies, with 7.1 percent of shares outstanding on loan, a number that has increased at 鈥渁 steady pace throughout the year鈥� according to Schutte.
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