How Bearish Are Investors on Basic Energy Services?
Short interest in Basic Energy Services
Short interest in Basic Energy Services (BAS) as a percentage of its float was 5.4% as of September 22, compared to 7.7% as of June 30. Since 2Q17, short interest in BAS has fallen 29% as BAS’s stock price fell 31%.
So investors cut negative bets on BAS as its stock fell. This move could mean that they saw diminishing downside potential in BAS. BAS is 0.08% of the iShares Micro-Cap ETF (IWC). IWC rose 6% year-to-date compared to a 50% drop in BAS’s stock price during the same period.
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Implications of short interest in BAS’s peers
Short interest is the number of shares sold short divided by the number of shares outstanding. Since June 30, 2017, McDermott International’s (MDR) stock price has fallen ~2% while short interest in MDR during the same period fell 12%. Since June 30, short interest in Precision Drilling Corporation (PDS) fell 23% while PDS’s stock price has fallen ~10%. So investors cut negative bets on MDR and PDS as the stocks fell, likely in anticipation of limited further downside in these stocks.
Next, we’ll see Wall Street’s recommendations for BAS.