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Analyzing Utility Stocks' Volatility and Short Interest

PART:
1 2 3
Part 3
Analyzing Utility Stocks' Volatility and Short Interest PART 3 OF 3

Investors Should Watch These Utility Stocks

NRG Energy

On February 15, 2017, NRG Energy (NRG) had a short interest-to-equity float ratio of 5.1%. It was the highest among the utility stocks that make up the Utilities Select Sector SPDR ETF (XLU).

Investors Should Watch These Utility Stocks

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In the past three months, NRG Energy rose 52.4%—the most among utility stocks with the highest short interest. NRG Energy’s short interest-to-equity float ratio fell 31.4% in the last three months. We discussed its earnings trend in the previous part.

NRG Energy also has the highest implied volatility among the utility stocks that make up XLU. Its high short interest could explain why. High short interest in a stock reflects the market’s expectation of a large fall. It can cause the implied volatility to rise.

WEC Energy

WEC Energy’s (WEC) short interest-to-equity float ratio is 3.9%. In the last three months, the stock rose 2.6%, while its short interest-to-equity float ratio rose 3.8%. Its net debt-to-EBITDA ratio is 4.1x. In the last four quarters, WEC Energy’s revenue rose 6.2%, while its operating profit fell 4.8%. Its operating profit margin is 23.1%.

Consolidated Edison

Consolidated Edison’s (ED) short interest-to-equity float ratio is 3.4%. Its net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) ratio is 4.1x. The stock rose 4.4% in the last three months, while its short interest-to-equity float ratio fell 3.3%.

In the last four quarters, Consolidated Edison’s revenue fell 7.5%, while its operating profit rose 13.3%. Its operating profit margin is 19.8%. Consolidated Edison is expected to announce its 4Q16 earnings results on February 16, 2017.

Entergy Corporation

Entergy’s (ETR) short interest-to-equity float ratio is 3.4%. Its net debt-to-EBITDA ratio is 3.6x. In the last three months, the stock rose 3.1%, while its short interest-to-equity float ratio rose 6%. In the last four quarters, Entergy’s revenue rose 5.5%. Its operating profit margin is 16.8%.

Scana

Scana’s (SCG) short interest-to-equity float ratio is 3.4%. In the last three months, the stock fell 4.4%, while its short interest-to-equity float ratio rose 4.9%. Its net debt-to-EBITDA ratio is 4.9x. In the last four quarters, Scana’s revenue rose 2.3%, while its operating profit rose 19.2%. Its operating profit margin is 27.0%. It’s expected to announce its 4Q16 earnings results on February 16, 2017.

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