Electric vehicle (EV) maker Tesla, Gucci owner Kering, and Japanese chip manufacturer Advantest are among the large-cap stocks with the highest percentage of funds betting against them, according to a data from Hazeltree, a provider of treasury services to hedge funds and other institutional investors.
While bearish sentiment towards a stock is typically measured by the percentage of a company’s shares that have been sold short, Hazeltree takes a slightly different approach by looking at how widespread that sentiment is among its hedge fund clients.
Using data from around 700 funds covering about 12,000 equities, Hazletree calculates a ‘crowdedness’ score for each stock in the range of 1-99 based on the number of managers betting against each stock. The firm’s latest figures give Tesla, Kering and Advantest a maximum score of 99.
Shares in Tesla and Advantest have both more than doubled so far this year and yet Hazeltree’s data suggests that hedge fund managers believe they could be heading for a fall.
Kering, meanwhile, isn’t the only luxury stock attracting short sellers with LMVH – which owns 75 brands including Luis Vuitton, Tiffany & Co, and Christian Dior – the third-most-crowded short among large-cap stocks in Europe, the Middle East and Africa, according to Hazeltree.