Sealy Can Sleep Easy

Short positions have been covered in mattress maker Sealy (ZZ) (the ticker is aptly named).

Between July 2006 and October 2007, the percentage of the company's Market Cap out on loan to short investors increased from 0% - 10%. Short sellers held on as the price started to rise after July 2006, from $12 then to $18 in April 2007. The price then dropped from $18 12 months ago to $7 in March 2008, but it has now rebounded and positions have been closed (the %MCOL is at 7% today).

Utilisation reached around 96% in October last year making it virtually impossible to borrow. It is now at 60% - the rest of the RUSSELL 2000 is at 38% and the rest of the North America Consumer Durables & Apparel sector is at 30%. Investors who wish to buy back shares in ZZ have 32 Days to Cover (short interest ratio).

Perhaps America has realised one thing; now might be the time to tighten purse strings; but one thing you do always need is a decent night's sleep.

Disclosure: none