Analyzing Weatherford’s Short Interest since 4Q16
Short interest in Weatherford International
Short interest in Weatherford International (WFT) stock, as a percentage of its float, was 12.1% as of March 17, 2017—compared to 10.5% as of December 30, 2016. Since the end of 4Q16, the short interest in Weatherford stock has risen 15%. As noted in the following graph, Weatherford’s stock price and short interest as a percentage of float have been inversely related since March 2015. Weatherford International is 0.42% of the iShares US Energy ETF (IYE). The Oil & Gas Equipment & Services industry makes up 15.8% of IYE.
Interested in WFT? Don't miss the next report.
Receive e-mail alerts for new research on WFT
Short interest and stock price
Short interest is the number of shares sold short, divided by the number of shares outstanding. A rise in short interest as a percentage of float, or a rise in short interest, indicates that more investors expect the stock’s price to fall. Weatherford’s stock price has risen 23% since December 30, 2016, despite the rise in short interest.
However, investors should note that the market could go against investors’ sentiment. Also, the share price could increase when investors start buying the stock to cover their short positions. Energy stocks are typically correlated with crude oil prices. What’s Weatherford’s correlation with crude oil prices? We’ll discuss it in the next part.