Global Stocks with Short Interest at an Annual High

It is as well to write about what the data is showing as opposed to what we are finding interesting in the news. Today, I take a look at companies around the world that have hit a new 52 week high in terms of short selling. If there is any sector theme it would be Consumer Discretionary, with a quarter of the names looked at in this category although you’ll note my caution regarding macro themes. We will look at Bob Evans Farms (NASDAQ:BOBE), Atwood Oceanics (NYSE:ATW), Lancaster Colony Corp (NASDAQ:LAMC), Dollar General Corp (NYSE:DG), Tower Group (NASDAQ:TWGP), Great Canadian Gaming Corp (TSE:GC), Autonomy (LON:AU), Midland Holdings Ltd (HKG:1200) and SKY Perfect JSAT (TYO:9412).

Bob Evans Farms (NASDAQ:BOBE) caught my eye since you don’t expect to see agricultural firms on the negative sentiment list but therein lies the oversight, since they are actually a restaurant group focused on pork foods. Inflation is rampant in this area given the rising feed costs for hog producers buying grain with the summer droughts. Is this the reason given some investors are gloomy about the Bob Evans restaurant chain? Demand to borrow has now risen to 6% of the shares in issue.

Atwood Oceanics (NYSE:ATW) is an offshore oil drilling firm with operations all over the world. Is this the glowing embers from the Gulf of Mexico oil spill, one wonders? Over 8% of ATW’s shares are on loan after the pace of increase picked up in late October.

Lancaster Colony Corp (NASDAQ:LAMC) is quite unlike it sounds, namely a food manufacturer with a specialty in salad dressings, sauces and candles. This $1.4bn market cap firm has 7.5% of its shares on loan after a pretty much straight line increase since this time last year apart from some profit taking when the shares fell in September. Given I have highlighted two Consumer Discretionary names in this report it is logical to wonder if there is a theme emerging. 25% of the names studied are in this category but we have to be careful to say that investors think the consumer is holding back given that this is one of the largest sectors in the first place.

The previously highlighted trend of pessimism towards consumer credit firms crops up in this report. Dollar General Corp (NYSE:DG) hits a new annual high at 4.5% of shares on loan. A new name appears in the form of Tower Group (NASDAQ:TWGP). They are not technically about consumer credit but consumer insurance and property brokerage. This could be a sector to revisit next week.

For a different type of company, step forward the Great Canadian Gaming Corp (TSE:GC). I guess Canadians need somewhere fun to spend all their potash and mining dollars! Alas, trouble must be on the horizon with a near doubling of short interest just recently to 7% of all shares. With some recent capital expenditure behind them some analysts are optimistic – so what is going on here?

In Europe, marmite stock, Autonomy (LON:AU) features with 6.3% on loan, making it in the top 10 UK largest shorts. However this was short lived since it is already down to under 4% since running the screen. Perennially unpopular Yell Group (LON:YELL) is up to 16.4% short and France’s video game publisher Ubisoft (EPA:UBI) is up to 10.5%.

Finally, in Asia, Hong Kong listed Midland Holdings Ltd (HKG:1200) saw a large bout of short selling on and after its recent price collapse to 10% of all shares. This is coming down already but shows that some and making investments to profit from slowing real estate activity in China given the property agency services they offer in HK and China. Japan’s pay TV broadcaster SKY Perfect JSAT (TYO:9412) has seen a quadrupling of short selling in the last 60 days.

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