Potential short selling opportunity if Asos and Yoox miss analysts' projections
Seeking Alpha Analyst Since 2010
Heard on the street article in last week's WSJ -- http://tinyurl.com/497hco3 -- pointed out that Asos and Yoox have very high valuations.
From the WSJ: "Online-fashion retailers have become as hot with investors as the latest looks to hit the runway. But with valuations reminiscent of the dot-com bubble, it wouldn't take much to throw a stiletto into investor expectations.
Take Yoox, which reported a 70% rise in 2010 operating profit Wednesday. Having more than doubled since its Milan float in late 2009, Yoox's shares are trading at 44 times forecast 2011 earnings. London-listed Asos is trading at 54 times, and its stock is up more than 300% in little more than a year. By contrast, traditional luxury retailer Burberry Group is trading at just 20 times."
As a potential short selling candidate, both stocks are not showing high demand to short. Just over 1 million shares of Asos's 42 million float are currently being borrowed and shorted. Just over 300,000 shares of Yoox's 32 million float are borrowed. The cost-to-borrow for both stocks is relatively low.Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.