Why have traders been buying The Hut Group (THG) shares recently?

Image of person checking their shares portfolio on mobile phone and computer

UK beauty and health company The Hut Group (THG) has had an eventful few weeks. For example, last week, the price of THG shares crashed 35% after a company update that left investors more concerned than optimistic about the firm’s future.

However, things appear to have turned around for the firm this week, with its share price rebounding significantly. Data from Fineco also shows that THG was the most traded UK company this week on the trading platform. So, what’s the cause of this sudden shift in investors’ attitude and appetite for the company’s stock?

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What is THG and why have traders been buying its shares?

THG began as an online company selling CDs and DVDs in 2004, but it’s since expanded to other product segments. At the moment, it specialises in four key sectors: beauty, nutrition, consumer lifestyle and luxury.

According to Fineco, THG was the most traded company in the UK this week, trading at 66% volume buy and 34% volume sell. The company’s share price was also up 11% after crashing 35% last week as mentioned.

The high trading activity of THG shares follows an announcement by the company that its founder, Matthew Moulding, had dropped a pledge of shares in the firm as collateral against a personal loan with Barclays.

Back in September, Moulding agreed a loan from Barclays secured against £182 million in shares. The removal of this pledge removes any possibility that shares could be sold to Barclays if Moulding defaults on the loan.

Earlier, THG had also announced that Moulding would relinquish his contentious ‘golden share’ in the business. This effectively gave him the right to reject any takeovers and acquisitions regardless of regular shareholders’ views.

The move, which was welcomed by both investors and corporate governance experts, will now allow the company to list on the premium segment of the London Stock Exchange.

This would make THG shares eligible for inclusion in FTSE indices such as the FTSE 100 and FTSE 250.

These recent developments appear to have rekindled investor confidence in THG, as seen by the company’s share price increase and high trading activity on platforms such as Fineco.

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What other shares have traders been buying and selling?

Here are the top 10 UK companies that saw the highest trading activity this week:

Rank

Company

Volume buy

Volume sell

1

THG

66%

34%

2

Tesco

50%

50%

3

NatWest Group

3%

97%

4

Wise-A

48%

52%

5

Admiral Group

100%

6

AVEVA Group

67%

33%

7

Dunelm Group

51%

49%

8

ITM Power

50%

50%

9

Domino’s Pizza

100%

10

Pearson

100%

 

Globally, these are the top 10 most traded companies:

Rank

Company

Volume buy

Volume sell

1

Sphere 3D

50%

50%

2

Vinco Ventures

56%

44%

3

Ocugen

49%

51%

4

Tesco

50%

50%

5

NatWest Group

100%

6

Plug Power

100%

7

Arrival

55%

45%

8

Alcoa-WI

50%

50%

9

DLocal Rg-A

50%

50%

10

Devon Energy

58%

42%

 

How can you start trading shares?

Investing is one of the best ways to grow your wealth, particularly over the long term. Luckily, it’s easier than ever before to buy and sell shares these days. As long as a company is listed on a stock exchange, you can buy its shares in just a few clicks using an online share dealing account.

To help you get started, we’ve reviewed and ranked some of the top-rated share dealing account providers in the UK.

We are also fortunate in the UK to have a government-approved tax-free wrapper that you can use to shield your investments from tax. This is known as a stocks and shares ISA, and you can invest up to £20,000 every tax year in it. Any growth or interest from investments held in a stocks and shares ISA is usually tax free.

Keep in mind, however, that all investing carries risk. Stocks can go up or down, and you could get back less than you put in. So, before you put your money into any investment, do your homework to assess its long-term potential. If you are unsure, speak to a financial adviser.

The post Why have traders been buying The Hut Group (THG) shares recently? appeared first on The Motley Fool UK.

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