Most shorted ahead of earnings

A review of how short sellers are positioning themselves ahead of earnings announcements in the coming week.

• Chipotle Mexican Grill sees short interest rise to levels not seen since 2009
• Record short interest at Swiss technology firm Leonteq and Korean chemicals firm Oci
• Imax's Chinese subsidiary continues to see short interest rise as shares slide

North America

Most shorted ahead of earnings this week in North America is Adeptus Health with 29% of the company's shares outstanding on loan.

Adeptus operates medical emergency rooms and provides diagnostic services. Shares have fallen 45% in the past 12 months with short sellers building up significant positions during this time and short interest climbing seven fold.

Jakks Pacific, last quarter's most shorted stock ahead of earnings, has fallen into second place with short interest of 26.7%. Shares have rallied 10% in the last three months with short sellers so far holding steady as shares climb.

Short interest in Polaris Industries has surged in the past 12 months reaching 17.9%. The maker of snowmobiles, motorcycles and the Slingshot, has seen sales and earnings stall in the last few financial quarters.

Chipotle Mexican Grill joins the top twenty most shorted stocks with 16% short interest currently, the highest level seen since 2009. Shares in the restaurant chain have fallen by 37% in the past 12 months, with the stock coming under pressure due to an E.coli outbreak at the start of the year.

Europe

Most shorted this week in Europe is Petroleum Geo Services with 15.6% of shares outstanding on loan.

Shares in the company have continued to decline after oil prices halved leading into 2015. Shares have fallen by 58% in the past 12 months alone as oil prices have yet to fully recover.

Fingerprint Cards features yet again among the most shorted stocks in Europe with shares seeing less momentum in the past six months after an impressive rally in 2015.

Despite shares rallying by 43% in the past two weeks, short sellers continue to hold onto positions in Leonteq, a Swiss financial technology company. Short interest has increased almost tenfold in the past year, with 10.6% of shares currently outstanding on loan, a record high.

Apac

Most shorted ahead of earnings in Apac is Korean chemical products company Oci. Short interest has risen to 13.7% touching record highs in recent days. Shares have bounced by 11% recently after declining a quarter from highs seen in the beginning of May 2016.

The decline of shares in Hotel Shilla has moderated in the past six months while short interest remains elevated at 13.6% as the Korean hotel and duty free shop operator battles a slowdown in tourism.

Lastly, Imax China has continued to see in increase in shorting activity ahead of earnings. Demand to short have increased with the cost to borrow surging towards 10% in the last few months.

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.