Positive Start for Odey in 2017 – Did His Shorts Help?

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After what Odey described as a “horrible” 2016, that resulted in a ~50% loss, Odey’s 2017 started positively. We review largest significant EU shorts currently held by Odey Asset Management.

Odey’s Shorts remain UK-Centric

Chart 1 shows the country distribution of significant shorts of Odey Asset Management(*). Odey’s shorts remain very UK-centric: All but one of 17 shorts are targeting UK companies.

The only non-UK short above 0.5% of total float is a 0.8% short (about £15 million) in Swedish homebuilding company JM AB (YTD +4.22%).

Two sectors with the most shorts in Odey’s portfolio are Consumer Discretionary and Finance with 6 and 5 shorts, respectively.

Chart 1: Country Distribution of Odey’s Shortsclost

Top 5 Odey’s Shorts

After a tough 2016, the start into 2017 has been positive for Odey Asset Management (ValueWalk: “After Brutal 2016, Odey Starts Off 2017 On A Positive Note”). In the following we attempt to shed some light on size and performance on some of the largest shorts in his portfolio.

Odey’s 5 EU shorts with highest % of issued share capital are depicted in Chart 2. Lancashire Holdings is the only short above 4% of issued share capital. This short has been as high as 6.12% in February 2016 and has since been reduced a number of times. Similarly, shorts in Tullow Oil, Ashmore Group and Intu Properties are all significantly below their 2016-peaks. An exception to this is a short in Debenhams which is on the rise since October 2016. This UK retailer is currently 4th most shorted Odey’s stock and is 8th most shorted UK stock in MostShorted.com records.

Chart 2: Odey’s 5 shorts with highest % of issued share capitalclost

When it comes to YTD performance of these five stocks, all but Ashmore Group (YTD +11.39%) are down: Debenhams (YTD -5.06%), Intu Properties (YTD -4.48%), Tullow Oil (YTD -2.33%) and Lancashire Holdings (YTD -2.59%).

It is notable that in 2017, Odey’s Debenhams and Ashmore Group shorts have been increased, while Tullow Oil short went down to 3.35% from 3.71%, Tullow Oil short is valued at about £94 million and has the highest money value of Top 5 Odey’s shorts. Interestingly, the other 10 significant short holders in Tullow Oil appear to remain steady in 2017 (see Chart 3). In spite of 1 year return of about 65%, Tullow Oil is the most shorted Oil & Gas company in our EU records and remains in our overall top 5 most shorted EU rankings.

Chart 3: Development of Significant Shorts in Tullow Oilclost

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(*) Data presented in this note is limited to significant short positions which at least equal 0.5% of company issued capital. Data presented in this note is as of February 3rd, 2017.

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