(Bloomberg) -- The record drop in Globe Life Inc. this week extended a streak of wins for the short-selling group that released a report against the insurance company. 

Fuzzy Panda Research, an anonymous organization that puts out reports on companies whose stocks it’s betting against, was the best performing activist short seller in 2023, according to an analysis by Breakout Point of firms that made at least two calls. It found that the companies Fuzzy Panda shorted fell 63% last year on average. 

Globe Life’s record 53% slump Thursday added to a successful start of the year for Fuzzy Panda, with shares of all three companies it has released reports on down so far in 2024. Its performance over the last few years stands out in what’s generally been a difficult backdrop for short sellers, who got hit in the meme-stock craze of 2021 and have been contending with a bull market. 

“Even if Fuzzy Panda is not as well known as Muddy Waters, Gotham City or Hindenburg, their track record is one of the most impressive,” said Breakout Point’s Ivan Cosovic, the founder of the Düsseldorf, Germany-based data tracking firm. “This has made them almost an insider tip in the community of activist short sellers.”

Fuzzy Panda did not respond to a Bloomberg News request for comment. 

Globe Life criticized the report — in which the short-seller claimed it uncovered “extensive allegations of insurance fraud ignored by management” — and said it would review its legal options. Shares of the company rose 20% Friday. 

“We reviewed the report and found it to be wildly misleading, mixing anonymous allegations with recycled points pushed by plaintiff law firms to coerce Globe Life into settlements,” the company said in a statement. 

Still, the report has appeared to raise concerns for shareholders, given that the company confirmed in March that it had been subpoenaed by the US Department of Justice. 

“With the recent disclosure that the DOJ has issued a subpoena to the company to investigate some of these allegations, we think this has created significant uncertainty for the shares,” Evercore ISI analysts led by Thomas Gallagher wrote in a note dated Thursday. 

He maintained an in-line rating but cut his price target on the company to $75 from $125 to reflect uncertainty as to how the situation will play out and whether Globe Life will be subject to penalties

Read more: Why Activist Short Sellers Stir Up Controversy: QuickTake

Analysts at Keefe, Bruyette & Woods said that while they see Thursday’s decline as overdone, the near-term uncertainty is an issue. 

“If the allegations are accurate (highly unclear), this would likely result in monetary penalties, major disruption to AIL sales, and reputational damage,” analysts led by Ryan Krueger wrote in a Thursday note maintaining a $130 price target and market-perform rating. He added that there were no accusations against the rest of Globe Life’s distribution, which should limit some potential impact. 

Not all of Fuzzy Panda’s targets have slumped since it announced short positions. Red Violet Inc., which the group shorted in 2018, has surged in recent years, and BioDelivery Sciences International Inc., which Fuzzy Panda said it was short in 2019, was bought by Collegium Pharmaceutical Inc. in 2022. Similarly, 2018 short bet Terra Tech Corp. merged with Unrivaled Brands Inc. in 2021. 

But the recent slumps among stocks targeted by its reports have drawn increasing attention. 

“Fuzzy Panda has been active since 2018, but they experienced a period of reduced activity from 2019 to 2021,” said Cosovic. “Their following has grown more substantially in 2022 and 2023, alongside their impressive track record in these years.”

--With assistance from Katrina Compoli and Bre Bradham.

(Updates stock moves at market close.)

©2024 Bloomberg L.P.