Short sellers only add to Goodman's horror run

SHARES in the struggling breadmaker Goodman Fielder have taken another leg down this year, with an increase in short-selling activity by hedge fund investors indicating uncertainty about the company's turnaround strategy.

SHARES in the struggling breadmaker Goodman Fielder have taken another leg down this year, with an increase in short-selling activity by hedge fund investors indicating uncertainty about the company's turnaround strategy.

Goodman Fielder, which faces increasing competition from home-brand products in the supermarket wars, has seen its shares hit fresh lows of less than 40? in the past 10 days.

The shares closed down half a cent to 42? yesterday, down on the 45?-a-share at which the company raised more than $259 million in September-October, and approximately 74 per cent below its post-financial crisis peak of $1.62, reached in October 2009.

Meanwhile, the company has re-joined the list of the top 20 most-shorted stocks on the ASX, according to Commonwealth Bank analysts using net short position data from the Australian Securities and Investments Commission.

As of last Monday, about 4.1 per cent of Goodman Fielder shares had been sold short, down from 5.5 per cent during last year's capital raising, but a sharp increase on late last year.

An equities analyst, Nizar Torlakovic, said the bank expected Goodman Fielder to deliver "a weak profit result in February, given tough conditions, and an increase in short selling activity was not unexpected".

"So far, short positions above this [4.1 per cent] level were short-lived," Mr Torlakovic said. "However, that may change if the result proves to be worse than expected."

Last year was a horror one for Goodman Fielder, with a profit downgrade, a new CEO, Chris Delaney, and $300 million writedowns.

The company declined to comment yesterday.