ADVERTISEMENT
ADVERTISEMENT

Traders are making a killing betting against retail

JC Penney has been the most profitable short in 2017.

People walk out of the going-out-of-business sale at Target Canada in Toronto.

No sector has been more profitable for short sellers in 2017 than traditional retail, according to a note from research firm S3 Partners.

In a note sent out to clients on Tuesday, S3’s head of research, Ihor Dusaniwsky, said that the top five most profitable short trades so far this year are all traditional brick and mortar retailers who “depended on strong foot traffic and higher margins to support their infrastructure and staff are being forced to find ways to cut costs, increase margins and eliminate underperforming locations.”

The note comes on the heels of another dismal earnings report from the sector, this time at the hands of Target, which fell 12.2% on Tuesday after missing on earnings and guidance. Short sellers have raked in more than $500 million in Target alone this year, amounting for a return on those positions of about 21%.

Interestingly, Target isn’t even providing the top return for shorts. That title belongs to JC Penney, which has awarded short sellers with a return of more than 25% so far in 2017.

ADVERTISEMENT

And while traditional brick and mortar retailers have provided shorts with the biggest gains in 2017, discount retailers have been giving them headaches. Dusaniwsky says that space is home to the five least profitable short trades for the year. Ollie’s Bargain has saddled short sellers with a loss of more than 10% in 2017.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.
ADVERTISEMENT

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.ng

Recommended articles

Here's everything to know about being a virgin on your wedding night

Here's everything to know about being a virgin on your wedding night

7 do's and don’ts of the Holy month of Ramadan

7 do's and don’ts of the Holy month of Ramadan

Top 5 sweetest celebrity mother-child relationships that stand out for us

Top 5 sweetest celebrity mother-child relationships that stand out for us

International Women's Day: 5 Nigerian female celebrities championing women’s rights

International Women's Day: 5 Nigerian female celebrities championing women’s rights

Top 5 female directors in Nollywood

Top 5 female directors in Nollywood

6 things that will break a Muslim's fast during Ramadan

6 things that will break a Muslim's fast during Ramadan

5 benefits of fasting during Ramadan

5 benefits of fasting during Ramadan

5 reasons Easter was more fun when we were children

5 reasons Easter was more fun when we were children

Dos and don’ts of supporting Muslims during Ramadan

Dos and don’ts of supporting Muslims during Ramadan

ADVERTISEMENT
ADVERTISEMENT