Here’s Why Kingfisher and Ocado are 2 of the Most Shorted London-Listed Stocks

Despite the recent performance of the FTSE 100, which has hit new highs in recent days, two companies in the blue-chip index have come under some selling pressure. Kingfisher (LON: KGF) and Ocado (LON: OCDO) are two of the most shorted London-listed stocks. Here's why: 

Kingfisher

According to data compiled by ShortTracker.co.uk, Kingfisher is the second most shorted stock on the London Stock Exchange, with 6.2% of the company's shares sold short. ShortTracker shows that some of the firms shorting the stock include AKO Capital, BlackRock Investment Management UK, and GLG Partners. 

Kingfisher, which is the parent company of home improvement retailers B&Q and Screwfix, has been grappling with consumer-related headwinds in recent years. This has led to a decline in the stock between 2021 and 2023. However, it has shown resilience over the last few months, with a 1.27% increase in share price for the year to date.

Nevertheless, the company's revenue and profit have declined over the last couple of years, with retail spending stagnating. In its 2023/24 full-year results, sales declined by 0.6%, with statutory pre-tax profit decreasing by 22.3% year-over-year. 

Ocado

Ocado is the third most-shorted London-listed stock, with 6.49% of its stock sold short. Firms, including BlackRock Investment Management UK, D1 Capital Partners, and Kintbury Capital, are short the stock.

Ocado shares are down 53.8% in 2024 and more than 30% in the last 12 months. Back in September 2020, the stock traded above the 2,900p per share mark. However, it currently trades at around 349p. The company is now in danger of being demoted from the FTSE 100 index. 

While many investors are positive about the company's outlook, there are concerns about Ocado Retail (a 50:50 joint venture between Ocado Group and Marks and Spencer), which, according to Kantar, only has a 1.9% share of the grocery market in Great Britain. There have also been disagreements with M&S regarding payments. 

Even so, in its latest trading statement, Ocado's retail revenue grew by 10.6% year-over-year, with volumes, active customers, and the average basket value also rising despite a slight dip in the average basket size. In addition, Ocado's technology division offers automated warehouse systems for other retailers. 

However, in a recent note, analysts at CFRA expressed concerns regarding this unit, stating the current roll-out of the Customer Fulfilment Centres (CFC) “looks sedated” and unlikely to meet their full-year estimate.