A recent analysis by UBS analyst Shaun Cousins reveals the most crowded long and short positions in the Australian retail and consumer sectors. According to the latest monthly crowding monitor, JB Hi-Fi and Coles remain the most popular long positions. Conversely, Guzman y Gomez, Endeavour Group, Lovisa, Super Retail, Domino’s, and Woolworths are the most heavily shorted stocks. These shifts reflect changing investor sentiment amid evolving market conditions.
The July crowding monitor presented a mixed landscape, with 54 per cent of stocks experiencing a decrease in crowding scores, while 46 per cent saw an increase. Premier Investments, a company known for its strategic investments and retail operations, recorded the most significant shift due to perceived valuation upside and the strong performance of Breville, in which it holds a 25 per cent stake. This indicates growing investor confidence in Premier Investments’ portfolio.
Short interest in Domino’s eased as optimism grew regarding potential cost savings following the departure of the chief executive. However, Endeavour Group, a leading retail drinks and hospitality business, experienced an increase in short positioning. This rise in short interest comes amid concerns about declining alcohol consumption and ongoing challenges in its turnaround efforts.
Finally, long positioning in Wesfarmers increased as the earnings season approaches. This increase is driven by expectations of strong performances from its Bunnings and Kmart divisions, suggesting investor confidence in Wesfarmers’ diversified retail portfolio.
