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What Does It Mean that Core Laboratories’ Short Interest Is Declining?

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Jun. 28 2016, Updated 11:06 a.m. ET

Core Laboratories’ 13F filers

In 1Q16, 173 funds bought Core Laboratories’ (CLB) stock, and 171 funds sold CLB’s shares. So CLB’s total buying funds outnumbered its total selling funds by two in 1Q16. As of March 31, 367 13F filers held CLB in their portfolio, though only eight of these 13F filers have CLB in their top ten holdings.

By comparison, 1,479 13F filers held Schlumberger (SLB) in their portfolio as of March 31. Remember, institutional investors or investment managers file the 13F form on a quarterly basis to disclose their recent investment holdings.

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Short interest

Core Laboratories’ short interest as a percentage of its float was 14.1% on June 20, as compared to 15.7% on March 31. Since the end of 1Q16, CLB’s short interest has decreased by 7%. As noted in the graph above, CLB’s share price and short interest as the percentage of float have been inversely related for the past three years.

Please note that short interest is the number of shares sold short, divided by the number of shares outstanding. A decline in short interest as a percentage of float, or a fall in short interest, indicates that fewer investors expect the stock’s price to fall. Since March 31, CLB’s stock price has gone up by ~8%.

Investor sentiment

Since March 31, CLB’s larger market cap peer Baker Hughes’s (BHI) share price has gone up by 10%. However, investors should note that the market could go against investor sentiment, and share prices could increase if investors start buying the stock to cover their short positions.

Continue to the next part for a discussion of crude oil and CLB’s stock.

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