The Short Report – 05 Dec 2019

Weekly Reports | Dec 05 2019

See Guide further below (for readers with full access).

Summary:

Week ending November 28, 2019

Last week the ASX200 recovered from the Westpac-inspired sell-off and once again shot up to new highs on little more than momentum, before it all once again ended in tears this week.

There’s a lot of shuffling around on the table below, mostly bracket creep, but a couple of moves are worth noting.

Kirkland Lake Gold ((KLA)) shorts had jumped to 12% then to 7% and back again four weeks in a row, before last week breaking the pattern and rising to a table-topping 17.9%.  Last week the Canadian based miner announced a takeover of compatriot Detour Gold and the share price promptly fell -9%.

Still in the dark here, other than to reiterate that Kirkland is listed in all of Canada, the US and Australia, opening up geographical arbitrage opportunity.

Fruit & veg grower Costa Group ((CGC)) has had an annus horribilis, and not just because of the drought, forcing a capital raising. Discounted capital raisings provide the perfect opportunity for successful shorts to cash out by applying for new shares. Costa shorts fells to 9.6% from 11.6% last week.

Bank of Queensland ((BOQ)) shorts fell to 7.4% from 12.3%. Just slot BOQ in for CGC in the paragraph above.

Bellamy’s Australia ((BAL)) shares have rallied 60% since the Chinese bid for the company, and strangely received Treasurer approval. Bellamy’s fell off the 5%-plus table two weeks ago from 8.4% shorted. Shares in peer a2 Milk ((A2M)) have consequently risen 20% in the same time frame, on the PE re-rating implied for the sector by the Chinese bid, and the simple hope a2 Milk is the next target.

The shorters don’t think so. Shorts in a2 Milk have been gradually rising ever since, and last week hit 9.1%, up from 8.0%.

And finally just a shout out to the shorters of oOh!media ((OML)). Last week OML shorts sat at 7.5%. Yesterday a trading update had the out-of-home advertiser leaping 24%.

No Movers & Shakers this week.?

Weekly short positions as a percentage of market cap:

10%+
KLA    17.9
GXY   17.0
SYR    16.0
GWA  14.9
ING     14.0
ORE    13.9
SDA    13.1
NXT    11.6
JBH     11.3
WEB   11.0
MIN    10.6
BGA   10.5
NEA    10.3
BKL    10.3
DMP   10.2
MTS    10.1
HUB   10.0


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