Ocado is now the most shorted UK stock

If someone is betting heavily against a UK stock I either own, or plan to own, then I want to know about it. Luckily for me, all firms with a net short position greater than or equal to 0.1% of the issued share capital of a UK listed company have to report that position to the the Financial Conduct Authority (FCA). The FCA publishes a daily short position update based on the notifications that it receives.

The FCA’s daily short position update is an important source of information for those who invest in UK stocks. I tend to ignore most of the daily updates and focus on the Friday one. There a a few things I like to do with it. In this post I will be looking at the short position update from Friday, 26 June, 2023

Top 20 most shorted UK stocks on 26 June, 2023

The first thing I do is rank all the stocks by their net short position. To do this I add up all the short positions reported by different reporting institutions against the same stock. The top twenty most shorted UK stocks are tabulated below.

Rank	Company	Sector	Industry	Net Short Position
1	Ocado	Consumer Staples	Food Retailers and Wholesalers	6.12%
2	Kingfisher	Consumer Discretionary	Home Improvement Retailers	4.80%
3	ITM Power	Energy	Renewable Energy Equipment	4.41%
4	Hammerson	Real Estate	Retail REITs	4.13%
5	Moonpig	Consumer Discretionary	Speciality Retailers	4.12%
6	Keywords Studios	Consumer Discretionary	Electronic Entertainment	3.97%
7	BooHoo	Consumer Discretionary	Apparel Retailers	3.64%
8	Naked Wines	Consumer Discretionary	Speciality Retailers	3.63%
9	Petrofac	Energy	Oil Equipment and Services	3.60%
10	Hargreaves Lansdown	Financials	Asset Managers and Custodians	3.40%
=11	Harbour Energy	Energy	Oil: Crude Producers	3.29%
=11	Cineworld	Consumer Discretionary	Recreational Services	3.29%
13	British Land	Real Estate	Diversified REITs	2.97%
14	Carnival	Consumer Discretionary	Travel and Tourism	2.96%
15	J. Sainsbury	Consumer Staples	Food Retailers and Wholesalers	2.92%
16	Johnson Matthey	Basic Materials	Chemicals: Diversified	2.87%
17	Primary Health Properties	Real Estate	Health Care REITs	2.85%
18	Tullow Oil	Energy	Oil: Crude Producers	2.78%
19	Melrose Industries	Industrials	Aerospace	2.72%
20	DFS Furniture	Consumer Discretionary	Home Improvement Retailers	2.40%

Ocado tops the list with a reported net short position of 6.12% against it. Ocado is a £4.14bn market cap consumer staples company. More specifically it’s a food retailer and wholesaler. After booming during the lockdown, its share price has been sliding since restrictions were lifted and shoppers started returning to supermarkets. But it soared up-to 40% last week after rumours of a takeover bid from Amazon started to spread.

There are nine consumer facing companies in the top 20 list. The short sellers certainly seem to think that shoppers wallets are going to continue to be squeezed in the months ahead.

DISCLAIMER: James J. McCombie owns shares in Kingfisher. The Storied Investor has no beneficial ownership position in any of the stocks or securities mentioned. No comment in this article should be construed as a recommendation of, or opinion regarding the future performance of, any stock or security or collection of them mentioned herein. Opinions expressed are the author’s and do not represent the views of The Storied Investor.