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Short sellers lose appetite for consumer staples

Richard Collings
Aug 17, 2022
Reproduced from S&P Global; Chart: Axios Visuals

Short sellers lost their appetite for consumer staples companies, with short interest in the sector decreasing 34 basis points between the middle and the end of July, according to S&P Global Market Intelligence.

Why it matters: After a rocky first half of the year the recession-resistant category has recovered over the past month, as investors seek a safe haven for their money.

  • The Vanguard Consumer Staples Fund has increased about 7% since July 18 from nearly $186 per share to almost $199 as of Tuesday's close.

Details: Short interest accounted for 3.23% of all outstanding shares of consumer staples companies, S&P says.

  • It's the lowest level of short interest in the sector since the end of February, the research and data provider says.
  • And it is the sixth most shorted sector behind consumer discretionary, health care, energy, informational technology and communication services.
  • However, it ranks ahead of industrials, real estate, materials, utilities and financials.

Yes, and: Within consumer staples, brewers, drug retailers and food retailers are the most shorted sub-sectors, S&P points out.

  • Short interest represented 5.3% of outstanding shares of brewers, 4.9% of drug retailers, and 4.4% of food retailers.
  • Soft drinks and hypermarkets (or supercenters) each saw the lowest level of short interest at 1.9% and 1.7%, respectively.

Meanwhile, the most shorted individual stock is Beyond Meat, at 31.3% of its float.

  • Yes, but: Short interest in Beyond Meat fell from 37.86% at the end of June.

Separately: Consumer discretionary remained the most shorted sector overall, with short interest at 5.46% of all outstanding shares.

  • Among the top five most shorted stocks, two were retailers at the end of July, including Bed Bath & Beyond and Big Lots.
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