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. This includes company stock with net short positions in excess of 0.5% against their issued share capital along with the identity of the position holders.
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, 21 July, 2023
Top 20 most shorted UK stocks on 21 July, 2023
After a long run at the most shorted UK stock, Ocado has fallen to 5th place. The net short position against it fell -1.05% to 3.75%. The top spot is now held by Kingfisher with a net short position of 5.20%.
| Rank | Company | Sector | Industry | Net Short Position | Change Since Last Week |
| 1 | Kingfisher | Consumer Discretionary | Home Improvement Retailers | 5.20% | 0.62% |
| 2 | ITM Power | Energy | Renewable Energy Equipment | 4.83% | 0.13% |
| 3 | Keywords Studios | Consumer Discretionary | Electronic Entertainment | 4.14% | 0.08% |
| 4 | BooHoo | Consumer Discretionary | Apparel Retailers | 3.87% | 0.10% |
| 5 | Ocado | Consumer Staples | Food Retailers and Wholesalers | 3.75% | -1.05% |
| 6 | Naked Wines | Consumer Discretionary | Speciality Retailers | 3.63% | No change |
| 7 | Hargreaves Lansdown | Financials | Asset Managers and Custodians | 3.40% | No change |
| 8 | Hammerson | Real Estate | Retail REITs | 3.37% | No change |
| 9 | Cineworld | Consumer Discretionary | Recreational Services | 3.29% | No change |
| 10 | Moonpig | Consumer Discretionary | Speciality Retailers | 3.27% | -0.26% |
| 11 | J. Sainsbury | Consumer Staples | Food Retailers and Wholesalers | 3.24% | 0.09% |
| 12 | Tullow Oil | Energy | Oil: Crude Producers | 2.86% | No change |
| 13 | Harbour Energy | Energy | Oil: Crude Producers | 2.78% | -0.51% |
| 14 | Johnson Matthey | Basic Materials | Chemicals: Diversified | 2.61% | 0.20% |
| 15 | Abrdn | Financials | Asset Managers and Custodians | 2.59% | -0.01% |
| 16 | Primary Health Properties | Real Estate | Health Care REITs | 2.54% | -0.24% |
| 17 | Alliance Pharma | Health Care | Pharmaceuticals | 2.43% | 0.27% |
| 18 | DFS Furniture | Consumer Discretionary | Home Improvement Retailers | 2.25% | -0.22% |
| 19 | British Land | Real Estate | Diversified REITs | 2.22% | -0.04% |
| 20 | Petrofac | Energy | Oil Equipment and Services | 2.19% | -0.12% |
ASOS has left the top 20 all together to be replaced by Alliance Pharma. This is described as a pharmaceutical company. However, it does not do much in the way of R&D. Instead it acquires existing consumer healthcare and prescription medicine brands.
The 10 biggest increases in net short position this week
Short sellers pilled onto AFC Energy over the last week. The net short position against the provider of hydrogen power generation technologies increased by 0.66%. It would appear that short sellers did not view the news—released last Tuesday—that the company had renewed a site lease and signed a five year off take agreement with Air Products GmbH. Perhaps that’s because the site needs to be repurposed, the company has no meaningful revenues at presents, and despite the £40m in cash on its balance sheet might need to ask shareholders (again) to cough up funds.
| Rank | Company | Industry | One Week Change in Net Short Position (%) | Net Short Position (%) |
| 1 | AFC Energy | Alternative Fuels | 0.66% | 1.96% |
| 2 | Kingfisher | Home Improvement Retailers | 0.62% | 5.20% |
| 3 | Severn Trent | Water | 0.52% | 1.08% |
| 4 | ITV | Radio and TV Broadcasters | 0.51% | 1.11% |
| 5 | Taylor Wimpey | Home Construction | 0.40% | 1.36% |
| 6 | Phoenix Group | Life Insurance | 0.37% | 1.52% |
| 7 | Carnival | Travel and Tourism | 0.30% | 1.61% |
| 8 | Alliance Pharma | Pharmaceuticals | 0.27% | 2.43% |
| 9 | Johnson Matthey | Chemicals: Diversified | 0.20% | 2.61% |
| 10 | Land Securities Group | Diversified REITs | 0.20% | 1.83% |
After AFC Energy, its Kingfisher that saw its net short position grow the most this week. It is also top of the most shorted UK stocks. Not a good sign. Short sellers don’t seem to think that the fall in inflation last week was good news for the company. They are selling into the headwind of an ongoing £300m share buyback programme which continued unabated last week.
The 10 UK stocks whose net short position declined the most this week
Short sellers trimmed their position against Darktrace by 1.44% this week. The net short position against shares in the autonomous cyber security artificial intelligence company now stands at a paltry 0.61%. Last week management said that an forensic audit—prompted by accusations from short seller that its published accounts were questionable—would not impact its previous financial statements, which can loosely be translated as meaning they found nothing notable.
Revenue growth of +20% was forecasted in the accompanying statement and the company’s shares jumped over 25% in price as a result, leaving short sellers running for the hills.
| Rank | Company | Industry | One Week Change in Net Short Position (%) | Net Short Position (%) |
| 1 | Darktrace | Software | -1.44% | 0.61% |
| 2 | Curry’s | Speciality Retailers | -1.27% | 0.52% |
| 3 | Ocado | Food Retailers and Wholesalers | -1.05% | 3.75% |
| 4 | Howden Joinery | Home Improvement Retailers | -0.60% | 0.50% |
| 5 | Harbour Energy | Oil: Crude Producers | -0.51% | 2.78% |
| 6 | Halma | Electronic Equipment: Gauges and Meters | -0.50% | 0.56% |
| 7 | Capricorn Energy | Oil: Crude Producers | -0.50% | 1.17% |
| 8 | Jet2 | Airlines | -0.50% | 0.59% |
| 9 | ASOS | Apparel Retailers | -0.49% | 2.09% |
| 10 | Moonpig | Speciality Retailers | -0.26% | 3.27% |
Ocado makes this list, perhaps unsurprisingly, given its fall from 1st to 5th on the top twenty most shorted UK stocks list. The list is also heavy on consumer facing retail businesses. The inflation news from the UK last week might have something to do with short sellers having decreasing confidence in their assertion that the future looks dark for these companies.
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.
The Storied Investor 