Short Covering in Auto Stocks

The Data Explorers' Stock Loan Index [DESLI] has revealed some interesting information regarding automobile stocks. Despite this sector declining in value on a global scale, short interest has actually decreased, too, as you can see from the loan line on this graph below. In July Ford (F) has nearly 30% of its Market Cap out on loan (%MCOL) to short sellers, and this figure has now come down to 19%. General Motors (GM) has decreased from 35% MCOL to 20% in the same time frame. GM is still 80% Utilised, however, Ford is 65%. However, the opposite is true of global Capital Goods stocks.

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Comments

[Bababooie:]

Bottom line, there is a market out there, of people that will always have a new car. I could not find an industry survey or a government site that has this information. The fact is there is a perennial new car buyer niche. There are other buyers whose run on vehicles sales are much closer tied to the economy. It is this niche that established the covering of Shorts. The Auto market may not be recovering, but for some, it may just be stabilizing

2008 Oct 27 12:49 PM