European laws have required institutions and individuals to disclose their short holdings above 0.5% in stocks for over a year now. ValueWalk has been covering updates on what hedge funds are shorting since the regulations enforced disclosure. It is always interesting to see what is playing out as a crowded bet, where hedge funds are losing and where they are making money on shorts. For example, a few weeks ago, we talked about how Blinkx Plc (LON:BLNX) is racking up short interest. The stock is now very close to becoming the the third most shorted name in the U.K, now that shares out on loan have risen to 7.8%.
Novus launches interactive short observer
Since good research helps us write great articles, we were pleased when Novus Partners made their interactive short database public. The European Short Observer Interactive is a great aggregator of data on short positions across Europe; you can check it out here. The resource helps in looking at all European shorts from one manager through a single click, and the best part is that it doesn’t require a membership anymore.
This comprehensive tool confirmed our suspicion that Lansdowne Partners has the heaviest short portfolio in the eurozone. The London-based hedge fund is shorting 28 companies with a market value of $4 billion at the end of November 2013. Lansdowne is followed by Cliff Asness’ AQR Capital, AKO Capital and one of our favorite hedge funds, Odey Asset Management. The firm’s co-founder and chief research officer, Stanley Altshuller said,
“Novus Research empowers investors to extract value out of the world’s investment data. The European Short Observer graphic is a result of meticulous data scrubbing and aggregation that compiles all of the available public data on shorting activity in Europe. The graphic enables investors to discover crowded and unique shorts as well as make inferences on particular managers’ investment styles.”
Consumer Discretionary is the most shorted sector
Clicking on each fund’s name or on the company’s name opens up a summary of all active short positions, which gives a good snapshot of what is happening over there. Clicking on Summary opens the breakdown of short interest both sector-wise and country-wise, from here you can filter data with respect to each category. Europe is following in line with U.S., as Consumer Discretionary is the sector with the highest short interest, followed by Information Technology and Industrials.
Explore this great tool from Novus and watch the online tutorial here.