Hammerson PLC (HMSO:LN)
12-month performance: -78%
Short sell activity: Buoyant
Insider activity: Bearish
Recent news: Intends to raise funds through rights issue and VIA Outlets stake sell
Hammerson plc is a well known British property development and investment company with a presence in 14 countries. It has a portfolio value of £8.3 billion consisting of 9 retail parks and 20 premium outlets most notable of which include Bullring in Birmingham, Les Terrasses du Port in Marseille and Dundrum Town Centre in Dublin and with a market capitalisation of £363 million making it part of the FTSE 250 Index.
Hammerson’s share price has nosedived by a staggering 82%, as a direct result of COVID-19 crisis, since the turn of the year. The UK property owner has only been able to collect a meager 16% of the rents from tenants in June 2020. Moreover, in order to cope with the crisis, Hammerson obtained £75 million under the government's COVID Corporate Financing Facility (CCFF) after which the stock price rose slightly. However, post the state support the price recovered to 137p, but declining thereafter below 100p and is currently trading at around 47p. Hammerson has further announced that it intends to raise £600 million which is more than its current market capitalisation. In addition to the capital raising it intends to offload 50% of its stake in VIA outlets to raise another £200 million.
Source: 2iQ Research
Given the substantial restructuring, it is not surprising that Hammerson is currently the most shorted stock in the UK by investment managers. As per 2iQ’s Short Data, approximately 109 million shares or 14.21% of shares outstanding have been shorted by investment managers estimated just over £51 million based on yesterday’s closing price. In total, 11 different investment managers and hedge funds have shorted Hammerson above a disclosable threshold of 0.50% of shares outstanding. Caxton Europe LLC, one of the world's oldest hedge fund is the largest short seller in Hammerson and has held a short position of 4.33% of shares outstanding as per latest disclosure on May 6th 2020, estimated to be £17 million at the time of shorting, now worth £15.7 million. Hammerson Plc is the only European stock where Caxton holds a short position above the required threshold of 0.50%.
Source: 2iQ Research *as of 7th August 2020
Due to the recent turn of events, the Chief Executive Officer, David Atkins has decided to step down in the spring of 2021 ending 10 years of service. He joined Hammerson in 1998 and was promoted to CEO in 2009. Moreover, Chairman David Tyler has also decided to step down and relinquished his Chairmanship after 7 long years. Key management executives, especially the CEO and CFO, have not purchased any shares since mid-2019. Generally speaking, data at 2iQ shows significant buying by insiders across the board at the dip created by the early corona woes however, no such insider support has been forthcoming in Hammerson .
Therefore, subdued insider trading activity combined with acceleration in short selling and no clear foresight for vaccination suggests significant challenges lie ahead for Hammerson.