Interesting shorts position developing, page-18

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16/06/19

16:10

Post #: 39081590
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Originally posted by Inductor: ↑

The shorting of NEA is a short term venture in my opinion.

The percentage of shorts applied is not high (at less than 2.5%), and is contingent on a large block being laid by what appears to be instos. This happened when NEA entered the ASX200, and resulted in those shorts being closed at a substantial loss … although with the transfer between funds on that date, it is hard to be sure. The recent spike looks to be another insto exchange, with the shorts being applied over the following days (hence the selling pressure and subsequent price drop)

We may see a lot of those positions closed as the price bottoms out and returns … there is still a lot of buying pressure here.

The release of the full year preliminary results in about 4 weeks will reinforce the share price, there is no reason to expect anything but another strong set of results. I have been here for years, and every reporting period since the US move has resulted in a jump in the share price.

The actual SP is not a concern from the point of view of multiples, given the growth rate. With the high level of growth continuing, the SP will only be reinforced by the annual figures. They also have a new customer in Canada and given its proximity and close relationship with the US, one would expect this market to accelerate even faster than previous experience indicates.

I think holding shorts whilst the instos manoeuvre is fine … riding off the giants' back. But to hold into the reporting period would be fraught with danger … I would expect a test of $4.00 at that point.

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Also don't forget they started the New York office. I presume those folks aren't just sitting on their backsides and waiting for the phones to ring. The cost to open a new office shouldn't be too material however the upside with a greater presence on the east side of the US could be quite lucrative. A lot of their operations have been out of Utah until now.

NEA Price at posting: $3.59 Sentiment: Buy Disclosure: Held
9 Upvote

0 Great analysis

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