Why would you short Tassals now?, page-95

First 95 Last

Share
Profile

Follow
WangChung

18,455 Posts.

255

18/12/20

09:56

Post #: 49672769
Share

Originally posted by dabozza ↑

Tassals is around 9-10% shorted at the moment. While this sounds high (and it is!), worth noting that stock markets in general are at higher levels of shorting. Essentially, there is a general belief that the markets are frothy as we head in to the end of 2020. Looking at the Shiller CAPE ratios (now 33+) or the Buffet's preferred Market Cap:GDP (now 175%+), there are arguments to make about the market being expensive even when considering the ultra low interest rate situation.

The other major factor on the ASX is the China trade story. Looking at the top 30 shorted stocks on the ASX, you can clearly see a trend of agriculture representing higher than normal: Tassals, A2Milk, Inghams (they don't export but also in the Ag sector), and Freedom Food (they have their own story really). There's also a bunch of commodities based companies on there like Cooper Energy or Western Area Resources. Motley Fool wrote a couple of weeks back: "Tassal Group Limited (ASX: TGR) has entered the top 10 with short interest of 8.1%. Short sellers don’t appear to believe management will deliver on its earnings growth guidance in FY 2021 due to COVID headwinds."

Steve Johnson of Forager Funds actually wrote a blog about shorting today. While not necessarily the most insightful, he was discussing a stock he bought which was 37% shorted: it went up 30% with the release of news confirming the earnings direction of the company not long after. His main point was understand the bear case, but don't be scared by it. If you are bullish on a stock, then the presence of shorters actually can make the upside even greater when they need to eventually unwind. And that often with hedge funds that specialise in shorting, they may short a lot of stocks and have big payoffs on only a few of them.

Right now the situation is heavy insider buying (presumably they know stuff?) vs increasing shorts (whom have not released any research). Let's see..

Expand

Steve Johnson is right.

I’ve always maintaned that a shorter is a shareholders friend, as the selling has already happened, but having to buy shares back (to return the shares to the lender) is still to occur.

TGR Price at posting: $3.51 Sentiment: Buy Disclosure: Held
7 Upvote

2 Great analysis

Reply

Top Stories

NTI

Neurotech knocked back by FDA as agency declares target condition not rare enough for special status

CKA

Cokal upgrades infrastructure for BBM ramp-up in Indonesia

COD

Coda Minerals (ASX:COD) enters rights issue to further exploration in South Australia

SLS

Solstice Minerals to ramp up drilling campaign at Yarri Gold Project

BCI

BCI reaches close of funding facility for salt-first part of Mardie project

BUX

Buxton projects new graphite province discovery at WA Narryer play

WCN

White Cliff jumps 24% on 'bonanza grade' copper rock chips at Rae project, Canada

ACW

Actinogen Medical ramps up Alzheimer’s treatment trials, targeting fast-track global approvals

RCE

Recce eyes Indonesia for novel anti-infective as Indo-Aus ties grow stronger

Week 40 Wrap: China's nonsensical stimmy hype wanes (shocking!); HotCopper's picks; oil & inflation

There are more pages in this discussion • 931 more messages in this thread...

First 95 Last

Add TGR (ASX) to my watchlist

Why would you short Tassals *now*?, page-95

Top Stories

Neurotech knocked back by FDA as agency declares target condition not rare enough for special status

Cokal upgrades infrastructure for BBM ramp-up in Indonesia

Coda Minerals (ASX:COD) enters rights issue to further exploration in South Australia

Solstice Minerals to ramp up drilling campaign at Yarri Gold Project

BCI reaches close of funding facility for salt-first part of Mardie project

Buxton projects new graphite province discovery at WA Narryer play

White Cliff jumps 24% on 'bonanza grade' copper rock chips at Rae project, Canada

Actinogen Medical ramps up Alzheimer’s treatment trials, targeting fast-track global approvals

Recce eyes Indonesia for novel anti-infective as Indo-Aus ties grow stronger

Week 40 Wrap: China's nonsensical stimmy hype wanes (shocking!); HotCopper's picks; oil & inflation

Featured News

Why would you short Tassals now?, page-95