Increased Short Interest in Bank of Hawaii

According to our data, short sellers have been increasing their positions in Bank of Hawaii (BOH) consistently over the past two years. Despite the reasonable spikes in the percentage of BOH's Market Cap on loan (%MCOL) due to dividend trading (as indicated by black diamonds on the graph below), there has been a general increase in the short interest of this bank.

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This is juxtaposed with a general fall in share price; from 54USD in April 2006 to 48USD yesterday. The bank said on January 28th that its fourth-quarter profits fell nearly 20 percent to $40.9 million from $50.9 million, because of a litigation charge related to its membership with Visa U.S.A (Bizjournals.com).

Newsratings.com said on January 29th that:

Analysts at DA Davidson maintain their "neutral" rating on Bank of Hawaii Corp while reducing their estimates for the company. The target price has been reduced from $54 to $51.

The bank's Utilisation has also increased in the past 24 months; from 2.5% in April 2006 to 22% yesterday. For those wishing to buy back shares, there are 9.55 Days to Cover (also known as 'short interest ratio'). The average volume of shares traded over the past two years is approximately 0.4M. Recently, there have been as much as 0.6M shares traded in BOH (see graph below).

The Utilisation for the rest of the US Equity (Others) Market stands at approximately 20%. For the rest of the North America Banks Sector, the average Utilisation is 22%, which means BOH is as heavily Utilised as other banks in the sector who have been affected by the credit crunch (see graph below).

Disclosure: none

Comments

[LesInk:]

This bank has been running well, isn't affectly directly by subprime mortgages, and has a strong history. The short positions are either expecting a sudden suprise or a long decrease as the subprime mortgage fiasco runs all banks down.

2008 Mar 06 10:07 AM