The Short Report – 09 Apr 2020

Weekly Reports | Apr 09 2020

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

Summary:

Week ending March 31, 2020

Last week saw the ASX200 take a stumble before recovering to resume the snap-back rally.

The number of short position movements was fewer last week than the prior two although the number of stocks now shorted by 5%-plus has reduced, as evident from the green at the bottom of the table. We should nonetheless take into account that volatile markets could likely make for haphazard voluntary reporting of short positions.

A handful of stocks saw big percentage point movements up or down, as would be consistent under the current circumstances.

Profit-taking on shorts of graphite miner Syrah Resources ((SYR)) continued unabated last week, with a fall to 7.2% from 9.7%, noting that three weeks earlier Syrah was sitting at the top of the table at 19% shorted.

Also seeing short-covering, to 5.9% from 7.0%, was Bega Cheese ((BGA)). The stock did initially drop along with the pack on virus fears but has quickly recovered and moved back above its pre-virus price, presumably because we’re all stuck at home eating Vegemite toast.

On the flipside, shorts in oOh!media ((OML)) leapt to 14.9% from 8.6% as the company looked to raise new capital, opening up an arbitrage play on discounted stock.

BNPL company Zip Co ((Z1P)) delivered a solid quarterly update yesterday but last week the shorters were circling, taking shorts up to 7.2% from 5.6%.

Myer ((MYR)) announced it was closing its bricks & mortar stores for a month and its shorts rose to 9.4% from 8.0%.

JB Hi-Fi ((JBH)) has closed its stores in New Zealand for a month. NZ ‘s earnings contribution is minimal and the perennial outperformer is expected to benefit from work-from-home based sales, yet shorts rose to 10.5% last week from 9.4%, putting the stock once again back at the familiar end of the table.

Shorts in Harvey Norman ((HVN)), a rival in work-from-home products, fell to 6.5% from 7.1%.

What is it the shorters have against JB Hi-Fi?

Weekly short positions as a percentage of market cap:

10%+
GXY   17.0
OML   14.9
SDA    13.2
ORE    13.2
ING     10.6
JBH     10.5
NCZ    10.1


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