Morning Report Friday 19 September 2014
Click here to see our Market Matters Video update - Banks, Iron Ore & Gold
Now Oroton (ORL) has a good report, what about poor old Myer (MYR)?
Yesterday, OrotonGroup (ORL) lifted its annual profit by 16%, leading to the shares rallying over 12%, following on from an even better performance from Harvey Norman (HVN) at the end of last month. Unfortunately, Myer (MYR), the stock I purchased a few weeks ago, recently disappointed the market, leading to a near 15% drop in the stock – not the stock picking results I expect. However, I remain positive the retail sector over coming years, so it’s simply about where my funds are best put to work today. MYR is now emerging as one of the most heavily shorted stocks in the market with short position rising from 9.9% to almost 13% - this equates to a massive 38 days average volume to cover the position. While short sellers often get it right and make enormous profits e.g. Fortescue Metals (FMG), sometimes they are wrong, leading to massive short covering rallies. This will likely occur in Myer if talks around Solomon Lew buying the iconic brand resurface. Below I share my specific thoughts on 3 leading stocks in the sector.
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