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bendipa,
Against that Morrisons own most of their outlets. Plus they've only drawn on about 25% of available liquidity. It would be more of a concern if they substituted debt for assets.
MRW's under-performance has little to do with shorting. You only have to compare it to Tesco over the past 12 months to see that Tesco's sp has fared even worse, and there are barely any shorts in that stock. The food retailers simply continue to be out of favour, certainly one of the worst performing sectors for 2 years running. Until recently banks had been about the worst for years. MRW's colossal debt mountain of £2.8bn doesn't exactly help sentiment either.
https://imgur.com/a/jLnFcPh
Yes the shorter's are driving this lower. At the moment Morrisons is one of the most shorted stocks on the ftse - it's in the top 10. The short position is around 5% but its most likely higher than that - as short positions only have to be declared if they are more than 0.5%.
This is why this stock has been yoyo-ing. Morrisons imo is in a strong financial position compared to years ago when the short position on it was way larger. I think Morrisons does a better job than Sainsburys, Tescos etc when it comes to generating profit on the amount of capital they employ.
The problem with Morrisons is that it has a lower market cap - this is why it attracts the shorts. Shares with lower market caps are more prone to movements (up or down) than shares with larger caps (generally speaking - of course there are exceptions like tech stocks) hence why the shorters flock to Sainsburys and Morrisons & not tescos. Of course this is one of many reasons why its being shorted - other reasons could be that some of these short funds are hedging - they might have positions in competitors and so take out a short positions on Morrisons - sneaky but it happens (looking at you Ocado). That combined with the fact that its growth has been relatively slow (for a smaller supermarket chain with a lot of potential for growth imo) - plus the squeezing of the grocery market by very competitive discount grocers like Aldi & Lidl (Morrisons being a mid tier fish in a very large pond) - makes the ideal environment for shorts.
I do think that Morrisons are in a great financial position and the opportunity for growth is there. It's definitely below what I think it should be worth. I think Morrisons would do really well if it was taken over - at this price I'd be surprised if amazon or others aren't eyeing this up.
Are the shorters really driving this lower? That was plausible when the declared short position was at 20% in 2016 but currently it is 5%. How can the hyenas be making any real gains when they keep having to fork out for divis and stock borrowing fees. MRW doesn't fit the profile of a company in danger of imminent collapse as did debt-crippled Carillion or Debenhams.
However if not the shorters then why is it priced so low? It has it's best sales performance for years albeit costs have killed the profit margin (but covid costs won't be here forever). A massive debt pyramid has chased after Asda so why not the massively superior finances of MRW?
hello, fingers crossed am 2.5k down on these at mo, these are so cheap at moment so am happy to buy more if we leave ill wait to see where the floor is (we have to be close once these shorters ****off) on a plus point theres a nice article on HL about FTSE 100 and FTSE 250 and shares do better on the 250
Final day is tomorrow. So I believe, after market close we will know. If MRW cannot go up on a up day, I doubt it will go up on a bad day. I think it should exit FTSE100.. But we never know... anything can change tomorrow.
Goodl luck..
thats it then we are out
MRW is making its own way for FTSE100 exit.. it is currently on 111th position which is automatic exit. FCIT is currently very close and above MRW market cap at 4.10B .. Unless MRW closes above 172p and higher today which I doubt they will definitely exit FTSE100... Also thats what shorters want.. Relegation to FTSE100 means further drop in share price and they make more money! Currently none of the good news helps ( Kantar etc) as this share is purely driven by the shorters.
Good luck!
this seems to be stuck at 170, for gods sake go up or go down so i can top up