Most shorted UK stocks: HL, Kingfisher, Abrdn, Royal Mail, Tullow Oil

UK stocks have continued to lag their global peers in 2023. The blue-chip FTSE 100 index rose by about 2% in 2023 compared to the S&P 500 index gain of over 24%. It has also trailed behind its European peers like the German DAX and the CAC 40, which have jumped to a record high. Here are some of the most shorted FTSE 100 and FTSE 250 stocks.

FTSE 100 index vs peers

Hargreaves Lansdown (LON: HL) is the second most shorted stocks in London after Petrofac, which I covered here. Over 7.19% of the total outstanding shares have been short as concerns about the company rose. 

Hargreaves Lansdown’s short-sellers have been highly profitable as the stock has plunged by more than 24% from its highest point in 2023 and by more than 64% from its 2019 high. There are chances that the stock will continue falling.

HL is struggling as the volume of UK stocks traded continues falling. Also, it is contending with stricter regulations in the UK. Last week, I wrote that the company – together with other brokers – is facing questions about double-dipping. It is also contending with consumer duty issues.

Kingfisher (LON: KGF) has consistently ranked as the most shorted stocks in the UK. The company, which is the parent of firms like B&Q and Screwfix, has a short interest of 6.3%. Like HL, these short-sellers have made strong returns as the stock has plunged by more than 27% from the YTD high.

Kingfisher’s woes were confirmed in November when it published weak financial results. Its Q3 revenue dropped by 2.1% to over 3.29 billion pounds. This weakness mostly came from France because of the unusually warm autumn. On the positive side, the company benefited from its strong e-commerce growth.

Abrdn (LON: ABDN) is another heavily shorted stocks in London. The firm, which was formerly known as Standard Life Aberdeen, has a short interest of 5.63%. Its stock has plunged by over 32% from its 2021 highs. After rising initially earlier this year, the shares retreated by over 20% to 181p.

Abrdn has faced numerous headwinds in the past few months. It has seen higher redemptions as the UK goes through a cost of living crisis. Also, the company’s revenue and profitability growth has been below par. 

Its most recent results showed that the company’s revenue rose by just 4% in the first half of the year to 721 million pounds. Its loss before tax narrowed to over 169 million pounds while the net outflows rose to $4.4 billion.

IDS (IDS), the parent company of Royal Mail and GLS, is also one of the most shorted stocks in the UK even after its strong performance this year. The Royal Mail share price has jumped by over 60% from its lowest point this year. They remain much lower than the pandemic high of over 500p.

Short-sellers believe that the company is facing major headwinds even after reaching a contract deal with its workers. Demand for letters and parcels is still falling while the company is facing competition, including from Amazon. 

Tullow Oil (LON: TLW) share price has plunged by over 85% from its 2020 highs. In 2023, the stock attempted to crawl back as it jumped by over 66% from its lowest point during the year. Tullow has a short interest of 5.7%. 

The company is struggling as the price of crude oil dips. Brent and WTI have dropped by double digits this year. Also, some of its operations in Africa like in Kenya are not doing well. 

Other heavily-shorted stocks in the UK are Asos, Pearson, Boohoo, and Future.

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