Swedish consumers are spending at their fastest rate since 2010 according to Nordea Bank which raised its estimate for GDP growth in Sweden to 1.5 percent in 2013 from 1.3 percent. Meanwhile hedge funds have been quietly increasing their short exposure in Sweden, one of the less troubled economies of the Eurozone. Most of the shorts in Sweden are concentrated in the industrial manufacturing space, two big name shorts that have come up are Sandvik AB (STO:SAND) and AB SKF (STO:SKF-A) (STO:SKF-B).
Take a look at all short positions in Europe here.
Hedge Funds – Lansdowne Shorts Sandvik and SKF
Sandvik is an engineering company that provides services in the machinery, mining and materials industry. The company has been missing earnings expectations by a significant margin in the last three quarters, whereas revenues have fallen more or less in the expected range. Sandvik AB (STO:SAND) reported revenue of $14.7 billion in FY2012 and earnings of $1.07 per share in the year, in 1Q2013 the company reported revenue of $3.3 billion which was 11 percent less than last year’s corresponding quarter. Sandvik AB (STO:SAND) has a market cap of over $15 billion and notable shortseller of the company is none other than Lansdowne Partners. The hedge fund has a 1.1 percent short in Sandvik.
AB SKF (STO:SKF-A) (STO:SKF-B) is a manufacturer in the rolling bearing and seal business. SKF is a short position of Lansdowne Partners, Platinum Investment whereas Marshall Wace very recently reduced position to less than 0.5 percent. AB SKF (STO:SKF-A) (STO:SKF-B) has a market cap of over $10 billion, shares are down 1.35 percent YTD. SKF missed analyst expectation in its earnings statement in Q1 when EPS fell below consensus estimates and was also below the number it reported in 1Q2012. The company reported revenues of $9.66 billion and earnings of $1.6/share in FY2012.
Hedge Funds – Elekta And SSAB, Popular Shorts In Sweden
Elekta AB (STO:EKTA-B) has been a popular short in Sweden, now about 10.08 percent of company’s outstanding shares are held in short positions. Famous names like David Einhorn’s Greenlight Capital, Jim Chanos’ Kynikos Associates and tiger cub Maverick Capital have shorts in Elekta which provides medical technology to hospitals. Shares have declined 0.39 percent YTD.
SSAB AB (STO:SSAB-A) is also a popular hedge funds short, which is not surprising given that the company is involved in the manufacturing of steel products, a sector that is pressured from the slowdown in China. SSAB AB (STO:SSAB-A) has declined 30 percent year to date, bringing profits for Jim Chanos, Marshall Wace, D.E Shaw and Cliff Asness’ AQR Capital. The total short interest in SSAB AB (STO:SSAB-A) amounts to 7 percent of the outstanding shares.
Modern Times Group Mtg AB (STO:MTG-B), a media company that owns several radio and TV stations in Sweden, has been gaining attention from shortsellers. About six hedge funds have a short in the company including AQR Capital and Luxor Capital. The entertainment company reported revenue of $1.99 billion and earnings of $3.42/share in FY2012. Shares of MTG trade around $42 and are up 27 percent for the year.
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