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Kier Group investors gained small victory following post-results rise for the City’s most-shorted stock

According to data published by Castellain Capital, the ‘shorters’ started building their positions in January, which, coincidentally, was the month debt-laden construction group Carillion was liquidated

Share price chart
Since then Kier shares have lost around 22% of their value, so some of the early short sellers will undoubtedly have made cash

The trading update from Kier Group PLC (LON:KIE) last Friday, which pushed its shares 3% higher, represented a small victory for investors in the civil engineer, which is heavily involved with London’s £15bn Crossrail transport project.

However, it acted as a poke in the eye to the most recently-arrived of the speculators betting against its success. For Kier is the City’s most shorted stock.

READ: Kier confident it will meet its full-year expectations, with results being weighted towards the second half

A quick refresher - short-selling is effectively a bet that the share price will fall, rather than rise. 

For most long-only investors, this strategy instinctively feels wrong.

But experts will tell you it is a legitimate method of balancing or mitigating risks within an equity portfolio.

The approach gained notoriety during the banking crisis when the hedge funds had a field day.

According to data published by Castellain Capital, the ‘shorters’ started building their positions in January, which, coincidentally, was the month debt-laden construction group Carillion was liquidated.

Since then Kier shares have lost around 22% of their value, so some of the early short sellers will undoubtedly have made cash.

Unsurprisingly, the retailers are also in the cross-hairs of short-sellers.

Pets at Home PLC (LON:PETS) is the second most shorted stock, while Marks & Spencer PLC (LON:MKS) is number five and Debenhams PLC (LON:DEB) is in sixth place.

Quick facts: Kier Group PLC

Price: 49.88 GBX

LSE:KIE
Market: LSE
Market Cap: £80.86 m
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