A handful of hedge funds have been shorting AFG recently in a...

A handful of hedge funds have been shorting AFG recently in a big way. To help protect their positions, they have contacted FIN journalists and anyone else who will listen, repeating the mantra that 'AFG is not transparent' and is 'carrying too much debt' etc etc. As evidenced in today's FIN article as well as recent AAP updates, the media is falling for the trick and is happily helping the funds to milk current investor anxieties.

What is going on is simply a case of couple of hedge funds banding together and deciding to manipulate AFG for short term gain. There is nothing surprising or mysterious about this. Although ASIC should monitor this kind of stuff more closely.

Despite the dramatic fall today, hedge funds stand ready to close short positions in an instant because AFG is now trading just above NTA value, yet is tipped to generate double digit EPS growth this year and next and pay a 44c dividend.

As every sane investor knows, AFG has roughly $500mill in cash and no short term funding or debt financing issues whatsoever.

Unless there is a major stock market crash in the US in the near future, I'm certain that hedge funds will be closing AFG short positions ahead of the half year results.

In any event, at current prices, and because it is so heavily shorted, AFG could easily surge 40% in a day on a bit of good news or change in US market sentiment.