Cheniere Energy’s Short Interest: Higher Than Industry Average
Cheniere Energy’s short interest
Cheniere Energy (LNG) has a high short interest as percentage of float ratio of 11.4%. The ratio has declined after peaking to 14.4% at the end of March 2016. However, it’s still greater than the historical four-year average of 8.7%.
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The above graph shows Cheniere Energy’s one-year closing price and short interest as a percentage of float. Short interest is the number of shares sold short. Short interest as a percentage of float is the number of shares sold short divided by floating shares.
A high percentage of short interest or an increase in short interest generally indicates pessimism for the stock. However, this might not necessarily result in a stock price decline since short position holders try to cover their short positions, which might result in a stock rally.
Cheniere Energy’s short interest as a percentage of float ratio has remained high compared to the industry average. The Alerian MLP Index (AMZ), which tracks 50 energy MLPs, has an average short interest as a percentage of float of 2.8%. The energy sector as a whole has a short interest as percentage of float ratio of 2.9%.
Put call ratio
Put call ratio is another measure used to look at investor sentiment toward a stock. A high put call ratio might indicate that a lot of investors expect the stock price to decline in the future. Cheniere Energy has a put call ratio of 0.25.
Next, let’s see why Cheniere Energy could benefit from the addition of new markets.