We are seeing active short selling in Canada Goose Holdings (GOOS) today with the stock down 25% on news that fourth quarter revenues of $115.52 million missed analystsâ€™ expectations.
GOOS short interest is $406 million; 8.29 million shares; 14.13% of float; 0.87% stock borrow fee.
GOOS is the fifth largest short in the domestic Apparel, Accessories & Luxury Goods Sector behind Under Armour (UAA), Lululemon (LULU), VF Corp (VFC) and Hanesbrands (HBI).
Shorts were down for the year prior to todayâ€™s price move. Shorts are up $104 million in mark-to-market profits today, bringing year-to-date profits to $84.7 million, up 23% on the year.
There is ample stock loan availability in GOOS so there is no fear of a technical short squeeze in the stock due to excessive stock borrow fees or recalls. With short sellers now in the black and the stock trending downwards for the last month we should see additional short selling putting further downward pressure on the stock.
In the longer term, the added short selling activity coupled with long shareholders, who may begin selling their holding to salvage a portion of their 2018 gains, may push GOOSâ€™s stock price down to levels last seen in 2017. Todayâ€™s price move has not only incentivized existing shorts to increase their GOOS exposure, but also attracted momentum short sellers into the name. We expect short selling to continue in the short term, especially if GOOSâ€™s stock price continues trending towards the $30 level.
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