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Key Quantitative Insights for Utilities Investors

PART:
1 2 3
Part 3
Key Quantitative Insights for Utilities Investors PART 3 OF 3

Traders Are Most Bearish on These Utility Stocks

NRG Energy

On April 7, NRG Energy (NRG) had a short-interest-to-equity float ratio of 4.5%, the highest among the utility stocks that make up the Utilities Select Sector SPDR ETF (XLU).

Traders Are Most Bearish on These Utility Stocks

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In the past three months, NRG Energy has risen 38.5%, the most among utility stocks with high short interest. Its short-interest-to-equity float ratio has fallen 7.7% during this period. Its net-debt-to-EBITDA ratio is 6.6x. We discussed NRG’s earnings trend in part two of this series.

As we saw in the first two parts of this series, NRG Energy had the highest implied volatility among the utility stocks that make up XLU. Its high short interest could explain why it has high implied volatility. High short interest in a stock shows the market’s expectation of a large fall, which can cause a stock’s implied volatility to rise.

Scana

Scana’s (SCG) short-interest-to-equity float ratio is 4.0%. In the last three months, Scana stock has fallen 9% while its short-interest-to-equity float ratio has risen 12.2%. Its net-debt-to-EBITDA ratio is 4.7x.

In the last four quarters, Scana’s revenue has risen 10.3%, while its adjusted operating profit has risen 18.8%. Its operating profit margin is 27.3%. It’s also one of the high implied volatility stocks discussed in part one of this series.

Consolidated Edison

Consolidated Edison’s (ED) short-interest-to-equity float ratio is 3.5%. Its net-debt-to-EBITDA ratio is 4.1x. Its stock has risen 5.2% in the last three months, while its short-interest-to-equity float ratio has fallen 3.7%.

In the last four quarters, Consolidated Edison’s revenue has risen 8.5%, and its operating profit has risen 19.8%. Its operating profit margin is 20.5%.

Dominion Resources

Dominion Resources’ (D) short-interest-to-equity float ratio is 3.3%. Its net-debt-to-EBITDA ratio is 6.3x. In the last three months, the stock has risen 0.9%, while its short-interest-to-equity float ratio has risen 9.2%. In the last four quarters, Dominion Resources’ revenue has risen 20.3%, while its operating profit has risen 28.4%. Its operating profit margin is 31.5%.

Ameren

Ameren’s (AEE) short-interest-to-equity float ratio is 3.1%. Its net-debt-to-EBITDA ratio is 3.5x. In the last three months, the stock has risen 2.7%, while its short-interest-to-equity float ratio has risen 0.8%. In the last four quarters, Ameren’s revenue has risen 3.7%, and its operating profit has risen 3.6%. Its operating profit margin is 22.7%.

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