Pernod Ricard (RI FP) leads the Eurostoxx in short interest, with a significant rise in short positions as its stock dropped 31% in 2024. U.S. beverage companies like Constellation Brands (STZ), Brown-Forman (BFB), and Ambev (ABEV) show similar trends of rising short interest and declining prices, highlighting industry-wide challenges.

Pernod Ricard is the largest wine manufacturer and the 4th largest alcoholic beverage manufacturer in Europe. RI FP is a €27B company (or $28B USD).

It holds the highest short position in the Eurostoxx, in terms of percent of float shorted. It also has the second-highest short notional, despite being one of the smaller companies in the Eurostoxx.

The short position, as a percentage of float, is now 5.23%, up from below 1% at the beginning of the year.

The stock was down 31% in 2024, after declines of 13% in both 2022 and 2023. The stock has lost half of its value. By comparison, the Eurostoxx index was up 8% in 2024.

This stock follows a classic pattern of a troubled company, where the short position increases as the stock price declines...

Pernod Ricard RI FP Stock Price and Short Interest as Percent of Float

This pattern is not just a trend but occurs monthly, with the short position growing as the stock declines and shrinking when the stock price rises.

Other large beverage companies were also down for the year: Anheuser-Busch (-17%), Diageo (-11%), and Heineken (-25%). These are not wine manufacturers, but their short positions tell a different story.

All three companies have a short position as a percentage of float of less than 1.5%.

Anheuser-Busch's short position increased by 30%, Diageo's by 20%, and Heineken's decreased by 37%. These figures are small compared to Renault's 400% increase in short interest.

In the U.S., Constellation Brands (STZ), Brown-Forman (BFB), and Ambev (ABEV) exhibit a similar pattern, with negative returns and rising short positions.

STZ was down 8%, BFB was down 30%, and ABEV was also down 30%. STZ’s short position tripled to 2.18%, BFB's tripled to 7.8%.

BFB

STZ

Rising short interest among beverage manufacturers points to market skepticism about their ability to recover amid ongoing sell-offs. The divergence between short positions and stock performance signals a shift in investor sentiment, warranting close monitoring.

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