Evening Brief – 04.15.24
Crowded Trades
Short sellers continue to queue up their bearish bets against Chevron and Tesla, while hedge fund bears circle the luxury goods sector in Europe, according to new market data from Hazeltree.
The alternatives-focused treasury and liquidity management platform, which tracks around 15,000 shares globally, discovered that Chevron and Tesla are now jointly ranked as the most crowded large-cap Americas securities in terms of short holdings, with a score of 99.
While Tesla has long been a popular portfolio position among short sellers, Hazeltree’s most recent monthly Shortside Crowdedness Report indicates that more hedge funds are turning against oil behemoth Chevron, with its crowdedness score climbing from 94 to 99. Exxon Mobil is the third most shorted U.S. large-cap stock, at 86.
Multiple newcomers joined the ranks, including Super Micro Computer (87), Capital One (76), Comcast (76), and Wells Fargo (74).
The research highlights the top 10 most-shorted securities in the Americas, EMEA, and APAC regions, including large-, mid-, and small-cap sectors. Using aggregated data from over 700 asset manager funds, the crowdedness score ranks securities that are shorted by the highest percentage of funds in Hazeltree’s database on a scale of 1-99, with 99 reflecting stocks with the highest percentage of funds shorting.
Bears have identified luxury goods as a top target among EMEA large-cap stocks. LVMH Moët Hennessy Louis Vuitton, or LVMH, was the most-shorted name, with a crowdedness score of 99. Kering, which owns Gucci, Balenciaga, YSL, and Alexander McQueen, was at 91.
Toyota was Asia-Pacific markets’ most crowded large-cap security for the second consecutive month, with a crowdedness score of 99, followed by Fujitsu, Commonwealth Bank of Australia, and Suzuki, each with a crowdedness score of 77.
Wayfair led the Americas mid-cap list, with a crowdedness score that increased to 99 from 87 month on month. Alstom, a French rail company, was the most shorted EMEA mid-cap at 99, while Yamaha led APAC shorts with a 99 crowdedness score.
Meanwhile, U.S. small caps have seen a surge in bearish bets in recent weeks, with short sellers abandoning long-standing energy shorts in favor of a flood of fresh positions across a variety of sectors and businesses.
“It is interesting to note that when compared to the Shortside report from six months ago, just 27 securities remain the same in our latest report,” said Tim Smith, managing director of data insights at Hazeltree. “These are mostly concentrated around the large cap well-known securities and to be expected, such as Tesla, Exxon Mobil, LVMH, Kering, Advantest and Commonwealth Bank of Australia.”
Furthermore, Smith observed that several of the Covid-affected stocks, such as cruise lines, appear to be losing interest in the same community, as ads and, most likely, bookings gain traction.