Australia's Most-Shorted Stock Has Habit of Burning Bears

There’s probably not a lot of people cheering the fact Flight Centre Travel Group Ltd. is Australia’s best-performing equity today.

Getting burnt by the travel retailer is almost a rite of passage for long-short funds Down Under. The market’s most-shorted stock, Flight Centre has a habit of burning bears, with an improved profit outlook in July and this week’s better-than-estimated earnings triggering stock surges.

The shares jumped more than 12 percent on Thursday, bringing gains this year to 58 percent. Meanwhile, short interest has remained -- somewhat doggedly -- above 25 percent for most of this year amid concern over the company’s debt load and the cutthroat industry it operates within.

And the pain may not be over yet. After being hit by an airline price war, Brisbane-based Flight Centre sees a normalization in fares going forward.

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