USA
Pharma attracts investors; short interest rises
The challenge facing much of the Pharma industry is delivering growth, while investors have become increasingly reliant on generous cash distribution policies through dividends or share buybacks. Short interest is ticking upwards, yet institutional investors are staying put.
Stocks covered include: GlaxoSmithKline Plc (LON:GSK), AstraZeneca Plc (LON:AZN), Pfizer Inc. (NYSE:PFE), Questcor Pharmaceuticals, Inc. (NASDAQ:QCOR), Akorn, Inc. (NASDAQ:AKRX), ViroPharma Inc (NASDAQ:VPHM), Jazz Pharmaceuticals Plc (NASDAQ:JAZZ), VIVUS, Inc. (NASDAQ:VVUS)
Equity lending income focuses on 100 names
U.S. equity securities lending income centers around a small number of heavily borrowed names; we look at the type of companies borrowed and the fees charged for these loans.
Looking at U.S. shares with large balances on loan, we see that they tend to be large cap shares with massive availability and despite the huge value of stock on loan the fees charged can never be high due to over-supply. Meanwhile, a very small number of stocks account for almost half of overall revenue.
Optimized Defensive Value 2012 - LSE:LAD | NASDAQ:MSFT | NSE:ONGC | NASDAQ:QLGC
The U.S. is the place to invest this year thanks to its strong free cash flow generation while emerging markets are best avoided as high capital investment has diluted cash returns. Banana skins lie everywhere whereby utilities, telecoms and some industrials are value traps, despite the dividend lure with short selling/underweight potential aplenty. Also, buy firms with high cash returns and those with low capital requirements. These are the market themes of the hard thinkers in Deutsche Bank’s global CROCI* valuation group.
Investors not keen on holidays
January is a crucial month for the Travel and Tourism sector, with up to 15% of summer holidays predicted to be booked this month. But the sector has been rocked again by Thomas Cook, which has hit another stumbling block with the lack of confidence in Carnival Cruises since the recent disaster in Italy. We drill further into the sector to highlight others subject to high or rising short interest.
Hedge Funds Look to Cash in on Human Weakness
As with most good intentions, New Year’s resolutions start off well but eventually taper out as the realities of winter buffet all but the most resolute of willpower. As a result short sellers are staying put in the shares with high self improvement exposure, despite a New Year’s rally in their share price.
U.S. stocks targeted ahead of earnings this week
Alongside the U.S banks and tech giants, there are a number of companies lined up to update the markets on their fourth quarter earnings which have been subject to high short interest over the past month.
Stocks covered include:Cubist Pharmaceuticals Inc (NASDAQ:CBST), Fastenal (NASDAQ:FAST), GATX Corporation (NYSE:GMT), Rockwell Collins, Inc. ( NYSE:COL), Coffee Holding Co., Inc. ( NASDAQ:JVA), Cree (NASDAQ:CREE)
Stocks on watch
Technology shake-up at CES drives hedge fund activity
The annual Consumer Electronics Show in Las Vegas sets the tone for what technologies to expect in the coming year. Whilst thin on the ground in terms of groundbreaking technologies, there is much buzz about companies offering innovative architectures. Those on the losing side are already being targeted by short sellers.
Stocks covered include: Atmel (NASDAQ:ATML); Cypress (NASDAQ:CY); AMD (NYSE:AMD); Arm Holdings (LON:ARM); Nvidia (NASDAQ:NVDA); Qualcomm (NASDAQ:QCOM)
Is 2012 the year for recovery?
Investors looking to bid farewell to recent soggy returns can look for sizeable gains by buying companies in recovery mode. The greatest Long Short strategy of 2012 would be to predict those companies whose intellectual property and assets are too strong to leave them on the ropes any longer, whilst also correctly guessing which high flying titans are due to slip on the proverbial banana skin. Securities lending flows highlight where the smart money is going.
Hedge funds unmoved by positive U.S. Retail sales forecasts
Black Friday was a record breaker for U.S. retail sales and December’s figures are forecast to exceed targets, according to Bloomberg reports. Despite the appearance of a healthy top line, increased promotions in a bid to reel in shoppers may hurt profit margins and short sellers have built significant positions.
Auto revs up but investors remain negative
Following a record year and improving forecasts, the global automobile industry remains on a rough track as short sellers increase negative bets amid reduced holdings by institutional investors.
Stocks highlighted include: American Axle and Manufacturing (NYSE:AXL), Amerigon Inc (NASDAQ:ARGN), BorgWarner Inc (NYSE:BWA), Fiat Spa (BIT:FI)), Fuel Systems Solutions (NASDAQ:FSYS), General Motors (NYSE:GM), Gentex (NASDAQ:GNTX), Mazda Motor Corp (TYO:7261k, Peugeot SA (EPA:UG), Tesla Motors Inc (NASDAQ:TSLA), Thor Industries (NYSE:THO)