Short Stories

ITV

Dawn Airey left her job at ITV (ITV) yesterday to return to Five as chairman and chief executive, says the FT. The Companies & Markets section of the paper says Airey's move could revive speculation that Five's owner, RTL (RTL), may be preparing a bid for ITV, or at least the 17.9% stake British Sky Broadcasting (BSY) Holds.

In short interest terms, the data shows that the percentage of ITV's Market Cap out on Loan to short sellers has risen from 4% in January to 7% today (the spike here is dividend trading which does not account for short interest). Utilisation is at 16%, so there is still plenty left to borrow and there are 15 Days to Cover. The average Utilisation for the rest of the EMEA Media Sector is 23%, and for the rest of the FTSE 100 it is 7%.  RTL, listed under BE Equity, has just 0.25% of its Market Cap out on Loan, even though it is 31% Utilised, meaning it is very difficult and expensive to borrow this stock.

BSkyB has 6.49% of its Market Cap out on Loan to short investors, with Utilisation at 24%. There are 21 Days to Cover. In the rest of the UK Media Sector, Trinity Mirror, Johnston Press and Yell Group are the most borrowed stocks.

Cattle class

Cattles, (CTT), the  subprime lender, has become the target of short sellers in the last four months. The data shows that 11.44% of the company's Market Cap is out on Loan (%MCOL) to short investors, up from 6% in December 2007. Marketwatch said last Wednesday the company plans to launch a £200m rights issue and apply for a banking license to diversify funding in light of the continuing credit crisis.  Utilisation is at 33%, up from 20% last November, and although this is a sizeable increase, this stock is still fairly easy to borrow as 77% of the available supply is left. For those investors who wish to buy back shares in Cattles, there are 14 Days to Cover, up from 6 days in mid-January. The average Utilisation for the rest of the UK Diversified Financials Sector is 22%, and for the rest of the FTSE 250 it is 19%.

Other stocks in the Financial Services Sector that have a significant %MCOL are Shaftesbury (SHB) at 17.54%, Provident Financial (PFS) at 12.73% and Intermediate Capital (ICP) at 11.67%.

Short interest in National City Corp

According to the data, National City Corp (NCC) is one of the most borrowed stocks in the North America Banks Sector, with 21% of its Market Cap out on loan to short investors. Forbes said that on April 21st, the financial holding company, which counts Retail and Commercial Banking, as well as Mortgage Banking and Asset Management among its companies, had reported a  $171 million first-quarter loss. The stock has now dropped to its lowest point in 17 years. The share price has fallen from 18USD in January, to 6.3USD today. Investors started to increase their positions in NCC in mid-March, when the %MCOL rose from 10% to 17% over a week, as the price fell significantly from 15USD to 7.5USD in the same time frame.

However, it is possible that investors believe the price will finally start to rise, as there has been some short covering, as the %MCOL has decreased from 23% to 21% in the last week. For those investors who wish to buy back shares and close positions, there are 12 Days to Cover, down from 19 Days to Cover on February 21st.

Utilisation is at 66%, up from 43% on April 17th so it is still fairly difficult to borrow. The Utilisation for the rest of the S&P500 is 8%, and for the rest of the North America Banks Sector it is 22%.

Another heavily borrowed stock is Indymac (IMB), with 38% of the company's Market Cap out on loan to short sellers. Reuters said on April 11th that Indymac, one of the largest independent U.S mortgage lenders, said it made $3.32 billion of mortgage loans in March, down 63% from March 2007. Indymac is 70% Utilised, so it is relatively hard to borrow this stock, although in the past two weeks shorts have been covered, perhaps because investors do not believe that the price, which has already fallen from 10USD to 5.5USD since January, will fall any more. For the remainder who wish to close out positions, there are 40 Days to Cover.  The average Utilisation for the rest of the U.S Small Caps is 20%. 

Short interest in VCG Holding

VCG Holding (VCGH), who, according to Google Finance "operates nightclubs that provide 'live' adult entertainment," have become the target of short sellers as of late. The data shows that the company, who operates The Penthouse and 'Tabu' clubs in Denver, Colorado, has 5.52% of its Market Cap out on Loan (%MCOL) to short investors. This is an increase from 2% last October. More recently shorts have been covered, even though the price is still falling; down from 12USD in February to 4USD today. Perhaps more interestingly, VCGH is 90% Utilised, and with a %MCOL that is not particularly high, it is obvious that this stock, rather like some of the employees of VCGH, could be expensive to borrow. The average Utilisation for the rest of the US Small Caps is 20%, and for the rest of the North America Customer Services it is 20%.

Mesa Air Group (MESA), provides its customers with regional air transportation. It has a %MCOL of 25% today, up from 10% last October. The share price has dropped from 5USD last October to 0.5USD today. It is 60% Utilised and there are 7 Days to Cover. The average Utilisation for the rest of the Russell 2000 is 35%, and the rest of the North America Transportation Sector is 17%.

BNP Paribas

The short interest in BNP Paribas (BNP) has been rising steadily over the past six months. The percentage of the company's Market Cap on Loan (%MCOL) has gone from 6% in October, down to 5% in December, and has now risen to 9.24% today. In the last week the %MCOL has risen from 8.3% to the figure today, as the price dropped again from 70EUR to 67EUR in the same time frame. Utilisation is at 22.1%, up from 12% in November and 18% in February. The average Utilisation for the rest of the CAC is 30%, and the rest of the EMEA Banks is 17%. For those wishing to buy back shares in BNP there are 15 Days to Cover.

BNP has kept itself out of the RBS and NRK style headlines, but on Tuesday the FT reported that JP Morgan was being 'particularly cautious' about Credit Agricole (ACA) and BNP Paribas, as the French Banks fell 1% and 1.7% respectively. The newspaper said that investors were concerned that further write downs and slow earnings might force Europe's banks to raise capital by issuing new shares.

Credit Agricole is a somewhat different beast, with a %MCOL of 5.5%, but this has decreased from 6.1% on April 9th when the shorts started to be covered and the price rose from 20EUR to 22EUR. The price has now decreased to 21EUR. Utilisation is at 31.5%, with 14.8 Days to Cover. Alliance and Leicester (AL.) has a %MCOL of 20.14%, Bradford and Bingley (BB.) is at 18.04%, and Société Generale (GLE) is at 13.99%.   

Shorts covered in U.S stocks

TheStreet.com has published its Short-Squeeze stocks of the week, and among them are LIN TV, the television and digital media company. LIN reported a year-end quarter increase in net income of 168% on a 15% dip in revenue. LIN currently has 4.95% of its Market Cap on Loan (%MCOL) to investors, and in the past fortnight this has decreased from 5.5%, as the price rebounded (and has since dropped off slightly). Shorts were mostly covered from April 11th, when the %MCOL decreased from 5.4% to 4.6% in three days, and the price increased from 9.6USD to 10.5USD in the same timeframe (please click to enlarge graph). For those investors wishing to buy back shares, the Days to Cover (short interest ratio) has increased from 18 days on March 21st, to 42 days today.

Next is Great Atlantic & Pacific Tea Company (GAP), whose %MCOL has decreased from 8.5% to 6% since March 21st, and the price then rebounded on April 13th; from 24USD to 25USD. Utilisation decreased from 50% in 21st March, to 36% today. The Days to Cover  has increased from 10.5 days to 14.5 days since April 9th. Ultra Petroleum (UPL) saw a sharp decline in its %MCOL April 15th, from 3.4% then to 2.2% today. The share price has risen from 72USD  on March 21st to 87USD today.

Skillsoft's (SKIL) price started to rise on April 17th, from 9.3USD to 9.9USD today. The %MCOL has started to decrease, from 2.2% to 1.9% in the same timeframe. (below, UPL).

   

Travel and Leisure

Bloomberg reported on Friday that Punch Taverns (PUN), the UK's largest pub landlord, opted against combining with Mitchells and Butlers (MAB) "prompting speculation that the credit markets are still too tight to finance takeovers in the industry." MAB is currently the most shorted stock in the UK Travel and Leisure Sector, with 17.29% of its Market Cap out on Loan (%MCOL) to short investors (please click to enlarge graph). The investor Robert Tchenguiz, who owns a 23% stake in MAB, is in talks to sell his stake, say Bloomberg. MAB's share price has declined from 900p in July 2007 to 350p today, having rebounded slightly late last week from 300p. Utilisation is not at 8%, so there is plenty to borrow should investors believe that the price will fall further. There are 13 Days to Cover.

The %MCOL of Punch is 7.29%, down from 17% in February. The share price has also rebounded to 610p from 510p in mid-April. Utilisation is at 21%, down from 54% in late January and there are 8 Days to Cover. Other stocks in the sector include Rank Group (RNK) at 10.8% %MCOL, Intercontinental Hotels Group (IHG) at 9.8%, Whitbread (WTB) at 9.53%, easyJet (EZJ) at 8.88% and British Airways (BAY), as mentioned in a previous blog with the chart below.

Is it short and sweet for Hershey?

According to the data, short sellers have increased their positions in Hershey (HSY), the makers of sugar, spice, and all things nice. Whether or not America has finally decided to watch what it eats and tighten the calorie count is not clear, but what is plain to see is that the percentage of HSY's Market Cap on Loan has increased from 6% last November to 9% today (please click to enlarge graph).

There has also been a fall in share price over the last year from 55USD in April 2007 to 36USD today. Utilisation is at 60%, up from 20% last October. For those investors who wish to buy back shares in Hershey, there are 30.2 Days to Cover. The average Utilisation for the rest of the S&P500 is 7%, and the rest of the North America Food, Beverage and Tobacco Sector is 9%.

Short interest mounts up in the Alps

Actually, it's not the French Alps we are talking about here. Our alerts tell us that Japan listed Alps Electric (6770) has seen a recent rise in the short interest as of late. The Nikkei 225 listed stock has a % Market Cap on Loan (%MCOL) of 7.5%, big-fry in Asian terms. Utilisation is at 38%, and the average Utilisation for the rest of this market is just 10%, to put it into context. The rest of the Japan Technology Hardware & Equipment Sector is 11%.

Bloomberg reported on April 4th that the audio equipment company fell to the lowest in six years. The share price has dropped from 1,450JPY in late December 2007 to 950JPY today. Investors could believe that the price will fall even more, but for those who wish to buy back shares in Alps Electric there are 6.6 Days to Cover.

Other heavily shorted stocks in the Nikkei 225 include Ebara Corp (6361) at 11.81 %MCOL, Pioneer Corp (6773) at 9.28%, Oki Electric Industry Co Ltd (6703) at 8.48%, and Mizuho Financial Group Inc (MFG) at 8.07%. Alps Electric is the next one down and Toto (5332), one of our best-timed shorts of 2007, is next at 7.29%.

Nokia: Short interest is mobile

Although the percentage of Nokia's (NOK1V) Market Cap that is on loan (%MCOL) is 2.68%, it is rising. Today the world's biggest mobile phone producer reported the biggest decline in four years (Bloomberg). You will see from this chart of the company's short interest in the past two weeks that the %MCOL has increased as the share price has gone down; from 21.6EUR on April 8th, to 20.2EUR today. However, Utilisation is at a mere 6.8%, so it is unlikely that there will be a short squeeze because there is plenty of supply. There are 4 Days to Cover.

The average Utilisation for the rest of the HEX25 is 15%, and for the rest of the EMEA Technology Hardware & Equipment Sector it is 18%. In the DAX, Siemens (SIE) has a %MCOL of 8%, marginally up from 7% in early March (please note large spike is dividend trading). Utilisation is at 14% and there are 8.4 Days to Cover.

In the FTSE 100, Vodafone Group (VOD) has 1% %MCOL, up from 0.6% in late December 2007. The share price has fallen from 190p then to 150p today. Utilisation is at 1.2%, so again a short squeeze is unlikely with so much supply left.