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, 24 November, 2023 and comparing it to the one from Friday, 17 November, 2023.
Top 20 most shorted UK stocks on Friday, 24 November, 2023
ASOS is still the most shorted UK stock despite short sellers trimming their net short positions this week. Retailers feature heavily in the top 20. There is of course ASOS, but also Kingfisher, BooHoo, Victoria, Moonpig, and Sainbury’s. Short sellers seem to think consumer confidence is going to take a hit. They have been thinking this was for quite some time.
Also of note are the asset managers abdrn and Hargreaves Lansdown. Is that because short sellers think global asset values will take a dive (i.e. a stock market crash) and ad valorem fees will fall. Asset managers charge fees on a percent basis on account values If share prices fall, then account values and fees fall. Perhaps, they also believe that savings and investment rates will decline, which would also crimp fees, and that fits with the attack on retailers. Short sellers seem to be sure that consumers will be spending less, and saving less.
The 10 biggest increases in net short position over the last week
Petrofac is top of the pile again. Short sellers are really building their net short position against the oil and gas equipment and service provider, and have propelled it up to 5th place in the most shorted UK stock table.
Again, consumer discretionary stocks feature heavily, seemingly confirming the view that short sellers think that consumers are about to start (or already have) cutting back spending.
The 10 UK stocks whose net short position declined the most over the last week
However, short sellers have also been trimming some of their bets against the consumer discretionary sector. Perhaps some of their bets (like Moonpig) have been moving against them for two long, Or in the case of ASOS, perhaps they think they have profited enough.
Ultimately, we can only speculate. However, the theme seems to be that the UK consumer is thought to be under pressure or about to come under pressure.
DISCLAIMER: James J. McCombie owns shares in Kingfisher and Greencore. 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 