The Short Perspective: Forthcoming Semiconductors Autos and Pharmaceuticals Earnings
We take a look at short interest in a selection of stocks reporting in the semiconductors, autos and pharmaceuticals sectors. Stocks covered include; Arm Holdings Plc – LON:ARM, CSR Plc LON:CSR, Aixtron AG – ETR:AIXA, Volkswagen Ag – ETR:VOW, Renault SA EPA:RNO, Ford Motor Company – NYSE:F, AstraZeneca Plc – LON:AZN, Sanofi-Aventis SA – EPA:SAN and Merck KGaA – ETR:MRK.
Following Apple’s outstanding results last week, curious eyes will fall on ARM Holdings reporting Q3 earnings on Tuesday. Investors in ARM Holdings, which has propelled itself to the forefront of chip design, have covered short positions over the summer, with short interest at an all time low of 3% of shares outstanding on loan. This is a long way off the 52-week high of 10% in June.
Elsewhere in the semiconductors sector CSR Plc and German listed Aixtron will report Q3 earnings on Tuesday and Thursday respectively. Short interest in CSR plc has increased from 5.5% to 7% over October. However, short covering over the past week has reduced this to 6%. Aixtron is still being heavily shorted following a surge in August which drove short interest to almost double to 38% of total share outstanding on loan, far above the sector average for EMEA semiconductors. However, funds who lend take an opposing view, with continuous investment over the year doubling institutional ownership from 15 million to 30 million shares.
In the auto sector, Volkswagen announced earnings at the end of the last week. It is pushing its Audi brand to be highly competitive against BMW (announcing earning next week) and Mercedes-Benz is gradually regaining investor confidence. Institutional ownership has been gradually rising and currently stands at 4 million shares, but is still only half that of a year ago. However, short sellers have been relatively inactive throughout the year, with short interest maintained at less than 1% of total shares outstanding on loan. Renault and Daimler will update the market on Wednesday. Both see short interest at 4%.
In the US, auto giant Ford will announce earnings on Tuesday. Short interest has remained at a consistent high of 12% over the second and third quarters of the year. However, there is evidence of some short covering of late, with the short interest falling slightly to 11% of total shares outstanding on loan.
Key players in the EMEA pharmaceuticals sector, AstraZeneca, Sanofi-Aventis will report earnings on Thursday. AstraZeneca has been subject to short covering over the past month reducing short interest to 2.8% after peaking at 3.5% in September. Sanofi-Aventis is generally a thinly traded stock amongst short sellers with short interest flat at 2%. However institutional ownership has increased by 20 million to 265 million shares since mid-August. Merck will also announce results on Tuesday. It has been subject to recent short covering with short interest decreasing from 5% to 2.5% over the past month, as the share price has declined. Finally, US listed Texas Instruments is due to report earnings on Monday. Its short interest has increased from 1% to 3% since August with institutional ownership falling by 20 million to 320 million shares.
