Short sellers have generally had a rough year in 2016, as the SPDR S&P 500 ETF Trust SPY 0.23% has surged 6.9 percent to new all-time highs. However, one short trade is paying off handsomely for Grants.
Back on June 2, Grants published a report that Signet Jewelers Ltd. SIG 0.86% and Snap-on Incorporated SNA 0.03% are generating much of their growth from internal lending and deceptive accounting.
Earlier today, Signet reported Q2 EPS of $1.06 on revenue of $1.376 billion, missing consensus analyst expectations of $1.34 and $1.44 billion, respectively. The news sent Signet shares plummeting 13.7 percent to under $83 in mid-day trading on Thursday.
Following the post-earnings selloff, Signet shares are now down 16.5 percent since the Grants report, and short sellers have been paid off handsomely. In that same time, Snap-on shares are down 5.1 percent.
“We saw success in a variety of selling channels including outlets, kiosks, and on-line due to improvements in our consumer websites and mobile sites,” Signet CEO Mark Light said, trying to put a positive spin on a disappointing quarter. “We remain confident in the medium and long-term prospects of our business.”
If Grants is correct in its accusations, Q2 may simply be…
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