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Short sellers push Treasury Wine Estates Ltd’s share price down

One of the market darlings, Treasury Wine Estates Ltd (ASX: TWE) share price has been slammed 15% in a few days although it is still up 28% in a year, trading on a forward price-earnings-ratio of 35x.

According to the Australian Financial Review, short sellers have been responsible for some of the price damage on the expectations of further bad news. Concerns over its China business and a wine glut have led to the sell-off, but the company confirmed it “is comfortable with the sustainability of its operating model in China, to build a portfolio of brands, and of its disciplined approach to managing inventory levels with its customers.”

Last year the CEO offloaded over $3 million of shares, which is never a good sign.

Another market darling, A2 Milk Company Ltd (ASX: A2M) has also been sold off 15% after an spectacular share price performance of 235% in a year. A disappointing earnings update was led to selling pressure.

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Motley Fool contributor Rosemary Steinfort has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Treasury Wine Estates Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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