Investors Are Betting Big Against Vodafone Group Plc (VOD). Are They Right?

In the latest fortnight, short interest in Vodafone Group Plc (NASDAQ:VOD) stock jumped by 10.16%, indicating a significant rise in bearish sentiment. When it comes to determining how a name is viewed by investors, short interest is often a useful tool. The average analyst recommendations at 0 suggests selling these shares. Between November 30 and December 14, the total number of shorted shares amounted to 9.7 million shares. That was 894,817 more shares than the total of 8.81 million shares in the space of prior two weeks, which means more traders or funds betting that the stock will go down. Average daily volume for VOD at the December 14th settlement plunged to 7,950,684, as compared to 9,711,347 at the November 30th report. That brought days to cover to 1.220547, a 22.05% increase from the 1 days to cover recorded at the prior short interest data release.

Vodafone Group Plc (VOD) will probably climb 28.09 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $33.85 price as 12-month high target. This represents a whopping 71.65 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $27, which represents a return potential of 36.92 percent when compared to the closing price of the stock of $19.72 on Tuesday, January 08. The lowest price target for the stock is $16.65 — slightly more than -15.57 percent from VOD’s current share price.

The stock is currently hovering around the first support level of $19.58. Below this, the next support is placed in the zone of $19.45. Till the time, the VOD stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 48.85 on daily chart, which may remain a cause for concern. If the price breaks below $19.45 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $19.88 mark may result into a pull-back move towards $20.05 level.

On 8th of January, Vodafone Group Plc (NASDAQ:VOD) shares ended lower after a volatile session. The shares dropped -0.46 points or -2.28 percent at $19.72 with a light trade volume of 6.016 million shares. After opening the session at $19.85, the shares went as high as $19.9066 and as low as $19.61, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $54.2 billion and now has 2.75 billion shares outstanding. Vodafone Group Plc (VOD) stock has lost -4.96 percent of market value in 21 trading days.

VOD stock has a trailing 3-year beta of 0.88, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $-0.63 a share in the trailing twelve months. The stock’s value has surged 2.28 percent year to date (YTD) against a decline of -39.47 percent in 12 month’s time. The company’s shares still trade -39.79 percent away from its 1-year high of $32.75 and 6.88 percent up from 52-week low of $18.45. The average consensus rating on the company is 0, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Shares of Vodafone Group Plc (VOD) are trading at a P/E ratio of 0 times earnings reported for the past 12 months. The industry VOD operates in has an average P/E of 14.19. Its P/E ratio went as low as 5.4X and as high as 14.27 over the 5-year span. Further, it is sporting a 1.05 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.31. 30 percent is the gross profit margin for Vodafone Group Plc and operating margin sits at 0 percent. Along with this, the net profit margin is 0 percent.

Let’s take a look at some insider activity at Vodafone Group Plc (NASDAQ:VOD) and see the pattern.