Shares of Deckers Outdoor Corp. climbed after a research report about high consumer interest in the company’s Ugg brand prompted investors to cover short positions.
Deckers advanced 9.3 percent to $38.11 at Thursday's close in New York, the biggest increase since Dec. 3. The shares have dropped 50 percent this year.
Ugg was the most searched brand online this holiday season, Experian, an Internet tracking firm in New York, said today in an e-mailed statement. Investors have been concerned that shoppers have switched from Ugg sheepskin boots to other leather styles as the company’s sales growth has shrunk to what analysts on average estimate is 4 percent this year from 38 percent in 2011.
“There is a very high short interest in Deckers and any little bit of positive data has been reason for covering those shorts,” Corinna Freedman, an analyst with Wedbush Inc. in New York, said in a phone interview today.
Freedman rates Goleta, California-based Deckers’s shares outperform, the equivalent of buy.
Short interest as a percentage of Deckers shares available for trading was 49 percent as of Dec. 14, the sixth most shorted stock on the Nasdaq Stock Market. Short-selling refers to the practice of borrowing shares and selling them, with the goal of profiting by repurchasing them later at a lower price.
Experian has been reporting all year that Ugg is a popularly searched item, said Matt Tatham, a spokesman. Its most recent Top Ten ranking was issued for the 12 weeks ended Dec. 22, he said.
CNBC earlier Thursday reported the Experian data.
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