Equities

This will send shivers down many Hedge Funds who have big short positions. So far of the 12 biggest shorts that have reported, quite amazingly despite just 5 “beating” (and 3 missing) – 11 out of the 12 stocks, or 91%, have closed higher on the day they reported. The average rise has been +8.2%.

But the only solace for the shorts is that after that 1 day of pain – so far at least – the stocks have as a group come off (but just by) -2.3% after they reported.

The 12 biggest shorts that have reported so far - it's been a miserable time for the shorts so far...

Source Coppo Report

Biggest shorts still to report this week

Source Coppo report

Biggest shorts still to report this week - biggest to smallest

Source Coppo report

Shorts still coming out this week

Some stocks with large short interest that report this week, will be closely watched & after seeing JB Hi-Fi’s huge +9.9% rally yesterday (with shorts at 14.35%) – there could be some more big moves in a number of these as well…

  • Treasury Wines reports Thursday (shorts 4.5%) after last week’s disgraceful attempt (by someone “offshore”) to whack the stock
  • Kogan reports Friday(shorts 8%) – this could have a big move – many still see as too expensive on 27x – needs to deliver to justify that premium.
  • Blackmores reports Thursday(shorts 8%) have a recent history of disappointing – expect that again I assume
  • Super Retail reports Thursday(shorts 8.1%)
  • Invocare reports Thursday (shorts 8.7%)
  • Domain reports Friday (shorts 2%) – not a fan prefer REA every time – has been sold off with weak result expected – so maybe bad news already factored in– which means maybe just an in line result may see some buyers come in.. REA came out with an in line result & it rallied +5.5% on Friday & up again today..

Looking at the last 7 Reporting seasons - what have the shorts done

  • On average have done little on the day of reporting (-0.3%) but then 4 mths later have risen +7.4%
  • This time (Aug 2019) the early results we have had 3 stocks with Short Interest above 7% report - so they will be in the biggest 20 when all have reported & of those 3 - the rises on Day 1 are huge ...
  1. JB Hi-Fi +10% (shorts 13.1%)
  2. AMP +11.9% (shorts 8.8%)
  3. Challenger +8.3% (shorts 7.2%)

So the early start has (so far) been a shocker for all of the big shorts.

The previous 7 reporting seasons - 20 biggest shorts ...

Source Coppo Report

Source Coppo Report

The chart above shows how shorts moved on the day of reporting (red bar) and then where they were 4 mths later (blue bar). 

In short - Feb 2018 was an absolute killer for the shorts...

Get more insights from the insto desk in the Coppo report

This article is an excerpt from The Coppo Report contributed to Livewire by Richard Coppleson, Director - Institutional Sales and Trading, Bell Potter. You can find out more by clicking here.

You can also stay up to date with the latest news from me by hitting the 'follow' button below and you'll be notified every time I post a wire.





Comments

Please sign in to comment on this wire.

Alex Wallis

Would love to hear another write up on why the GMT research report was "disgraceful", particularly in the context of the research out of the Bell Potter marketing department, should you get a chance Coppo

Nicholas Christian

So in 'short,' you're say the shorts need to start wearing long pants?? What about when it gets hotter?