The BWX Ltd (ASX: BWX) share price has been a strong performer on the Australian share market on Wednesday.
The personal care products company's shares were up as much as 7% to $2.58 at one stage today.
This means its shares have almost doubled since crashing to a 52-week low of $1.34 in January.
Why is the BWX share price charging higher today?
With no news out of the company or broker notes that I'm aware of, today's solid share price gain is a little bit of a mystery.
But given the fact that BWX's shares are one of the most shorted on the Australian share market with short interest of over 11%, some of the buying could be due to short sellers closing positions.
When you short shares you need to borrow them from another party in order to sell them. Then in order to close your position you need to buy shares (ideally at a much cheaper price) to replace the ones you borrowed.
Why have BWX's shares almost doubled in three months?
At the end of last year things were looking incredibly bleak for the company behind the Sukin skincare range.
Just before Christmas the company downgraded its profit guidance again due to a slowdown in sales of Sukin, weakness in China, a poor performance from its U.S. business, and issues with its Sukin Domestic ERP start-up.
But thanks to an encouraging improvement in its performance late on in the first half and early in the second, investors appear to believe that the worst is behind the company and have been snapping up shares on the cheap.
Should you invest?
If BWX can return to form in the second half and carry it through to FY 2020, then it could prove to be a great investment at the current price.
However, I'm not completely convinced that the company has moved on fully from its issues and intend to stay clear of its shares for the time being.
For now, I would sooner buy fellow exporters A2 Milk Company Ltd (ASX: A2M) and Treasury Wine Estates Ltd (ASX: TWE).
