Citadel is short-selling 21 UK stocks, according to the latest reportable short positions data from the Financial Conduct Authority (FCA).
The hedge fund is betting that the share prices of these companies will fall in the coming weeks or months. Short-selling is a way for investors to profit from a decline in stock prices.
The 21 stocks in the crosshairs
Citadel is a major hedge fund with over $62bn in assets under management.
Its short positions can significantly impact share prices. As an investor in UK stocks, I strive to keep up to date with the opinions and actions of big market movers like Citadel.
As of 6 April, Citadel held reportable short positions in 21 UK companies. The FCA requires funds disclose their short positions if they reach a specific threshold, which is when the net short position is equal to or greater than 0.5% of issued share capital.
| Name of share issuers | Net short position (%) | Date short position began | % price change since short opened |
| boohoo Group | 0.90 | 05/04/2023 | 0.0% |
| International Distributions Services | 0.83 | 27/03/2023 | 4.3% |
| ASOS | 0.76 | 29/03/2023 | 2.5% |
| abrdn | 0.69 | 24/03/2023 | -1.3% |
| Johnson Matthey | 0.68 | 05/04/2023 | 0.4% |
| Smith & Nephew | 0.62 | 03/04/2023 | 1.7% |
| The Gym Group | 0.62 | 16/03/2023 | -16.2% |
| Hanover Insurance Group | 0.61 | 07/03/2023 | -5.0% |
| Wetherspoon’s | 0.61 | 31/03/2023 | -0.6% |
| Deliveroo | 0.60 | 22/03/2023 | 5.2% |
| Elementis ORD | 0.60 | 30/03/2023 | -0.5% |
| Redrow | 0.60 | 03/03/2023 | -5.5% |
| Savills | 0.59 | 29/03/2023 | -0.9% |
| Assura | 0.58 | 31/03/2023 | -1.4% |
| Direct Line Insurance Group | 0.53 | 05/04/2023 | 3.1% |
| Energean Oil & Gas | 0.52 | 29/03/2023 | 3.7% |
| Barratt Developments | 0.51 | 30/03/2023 | -3.0% |
| Intercontinental Hotels Group | 0.51 | 17/03/2023 | 3.6% |
| Berkeley Group Holdings | 0.50 | 14/03/2023 | 3.3% |
| Howden Joinery Group | 0.50 | 05/04/2023 | -2.2% |
| Persimmon | 0.50 | 30/03/2023 | -2.2% |
You win some…
The FCA data show the date when the short position was opened. By looking at the change in the shorted companies’ stock prices since Citadel began shorting, I was able to calculate Citadel’s success rate up to the time of writing.
| Outcome, as of market close, 6 April | Number of positions (%, out of 21) |
| Profit | 11 (52%) |
| Neutral | 1 (5%) |
| Loss | 9 (43%) |
Of the 21 companies, a slim majority (11) have seen a share price drop since Citadel began shorting them.
Citadel’s biggest success so far has been with The Gym Group. The fitness firm has seen its share price tumble 16% since the hedge fund started shorting it on 16 March.
That sell-off was prompted by the release of The Gym Group’s annual results, in which it forecast energy costs would be £10m higher this year than in 2022. As a low-cost gym, the chain has had a hard time passing on inflation to customers. Still, the company plans to open 12 more sites, all of which will be self-financed.
All pain, no gain?
I don’t own any of the stocks Citadel is shorting. Of the 21 named, I’d stick up for just one: Persimmon. The housebuilder has already seen its stock price halve over the last 12 months.
With a forward price-to-earnings (P/E) ratio of 9 and a strong balance sheet, I think the company faces limited downside. I will add Persimmon shares to my portfolio when I next have spare cash.
This post was originally published on Motley Fool
