Stock Alert: Hewlett Packard
Fri, 2011-08-19 12:59
Hewlett Packard (NYSE:HPQ) shocked the market yesterday with news of its agreed acquisition of Autonomy (LON:AU) and plans to pull out of the PC market. While its results were broadly in line with expectations it is worth looking to see how institutional investors who lend their shares and short sellers were positioned in the stock in the run up to the news.
Institutional investors who lend have steadily reduced their holdings by 17% over the past year to 490 million shares or 21.5% of the company. This is slightly underweight compared with the average across the S&P 500 Index at 25.5%. Short interest is low, with only 12 million shares or 0.5% of the total shares outstanding on loan. However, the direction is interesting, having trebled since mid-July in the run up to earnings.
Recent research which compares the Data Explorers securities lending data with the US public short interest shows that daily stock loan data is a good predictor of the bi-monthly public short interest. In the period 1 – 15 August, Data Explorers has observed a 90% increase in the quantity of shares on loan – a trend that one might expect to see replicated when the US public short interest data is published on 24 August.
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