INTU Properties, Earnings Shock Coming?

Odey Asset Management have £105m worth of shares short on UK stock INTU going into earnings, are they expecting a miss?

This is an interesting one… INTU Properties. They basically own a lot of commercial property across the UK and I believe Spain, Trafford Centre in Manchester, Westfield, a lot of shopping centres. That is the game we are in.

Why is it catching my eye specifically? Well, they have earnings out on the 28th July. Okay, so not long to go. Why are they catching my eye. Well they took a hit on Brexit, fine, they’ve slightly recovered but they’ve chopped around.

Now, what is interesting is that Odey Asset Management are increasing their short position. No Crispin Odey, according to the media, made about 220 million on the Brexit falls. So he was positioned short for it, but he made money. He did have a short position opened INTU Properties, however, since Brexit, he has been adding and increasing his short position and he’s not got about 3.8% shares short.

Let me just double check that. Sorry, he’s got 2.76% of the total shares available short as a total… well, there’s two fund managers who have got positions short, the total is 3.81 but Odey himself – Odey Asset Management – has got 2.76%.

Now, if we do some numbers on this to put this into perspective and then we can see if there’s a trade from this… Okay, there are 1.3 billion shares in issue and he has 2.76%

So he has approximately 103 million shares, or value should I say – Pounds worth – of shares short. Now bearing in mind this guy has got £10 billion under management,  give or take. That’s about 10% of his total assets short on this particular stock and he’s been adding to his short almost every day, not every day but pretty frequently since then. In July he’s added a little bit, so he’s got this bigger short position here, he hasn’t taken it off the table when it’s hit here, he is betting on a fall further and he’s got quite a significant position in it – £103 million worth of short.

So, what does that say about things? Well he’s probably done a lot of research. We’ve got earnings coming out on the 28th, so not long at all, he’s been adding to his short after Brexit.  This is quite a big position for him. It’s actually his fourth or fifth biggest short position, you can’t get into too much detail for which fund it is for but it’s over his whole company. So that’s quite significant in itself. He’s obviously got some reason that he’s pushing the short on this.

Where is the trade on this? Well, I don’t know. It’s a bit of a gamble taking a short prior to earnings – you’d basically be gambling on them and not coming good, coat tailing Crispin Odey and his staff’s analysis on this short. Or the vice versa trade of it, if it does rip to new highs after it, maybe he’s going to be looking to cover, but he seems that his finger on the pulse.

So what’s the trade up, what’s the trade idea from this? I’m undecided myself but I just thought I’d share that information with you and let you know that my fund manager has got a decent size short position on this stock, earnings are coming out soon, how do you ?play it. Not really convinced either way at the moment, maybe something better will come to mind as we get closer to the date, but I think it’s interesting nevertheless.

Let’s have a look technically very, very quickly. Technically we are down quite a bit from the highs, we’re in a down trend, it’s very choppy, it’s really thin, there’s not much volume on it. Obviously the Brexit has taken a big slice out of it, and it’s tried to bounce back up, bit of resistance here, but of course, when earnings come out, technicals aren’t going to come into play whatsoever.

So, there we go, that’s all out there, Crispin Odey, decent sized short position in INTU, results coming out on 28th July.”