Do you own any shares in the following companies: Lion Electric Co., Hut 8 Mining Corp., Goodfood Market Corp., TMC The Metals Co. Inc., Peak Fintech Group Inc., Lightspeed Commerce Inc., Flora Growth Corp., Air Canada or Canadian Pacific Railway Ltd?
If so, you may want to double-check your buy-and-hold thesis.
Short-selling activity has recently become elevated in these stocks, which academic studies warn may foreshadow underperformance (in some cases, the short positions may reflect hedging or arbitrage trades and may not be purely bearish signals).
Data-analytics firm IHS Markit tracks revenues generated from securities lending. Since these revenues are paid by short sellers to borrow stocks, they may be viewed as proxies for bearish sentiment on a company.
The Canadian company with the highest amount of loan revenues ($5.6 million) in the third quarter was Lion Electric Co., a Montreal-based manufacturer of electric trucks and buses. It went public in May and is down 14.5 per cent over the last three months. Lion Electric has a contract to supply Amazon.com Inc.