How Does NuStar Energy’s Short Ratio Compare?

NuStar Energy’s (NS) short interest as a percentage of float has changed dramatically since the beginning of 2016. The figure, which was close to 1.0% by the end of 2015, has increased to 5.2%. This rose sharply after its 1Q16 earnings announcement on January 29, 2016.

The above chart shows NuStar’s one-year closing price and short interest as a percentage of float. Short interest is the number of shares sold short, whereas short interest as a percentage of float is the number of shares sold short divided by floating shares. A high percentage of short interest or an increase in short interest generally indicates pessimism about the stock. However, this might not necessarily result in a stock price decline. Short position holders may try to cover their positions, which might result in a stock rally.

The Alerian MLP Index (AMZ), which tracks 50 energy MLPs, has an average short interest as a percentage of float of 2.9%. NuStar’s percentage is quite high compared with the industry average, which might indicate a bearish sentiment. The energy sector as a whole has a percentage of 2.8%.

Sunoco LP (SUN), Cheniere Energy Partners (CQP), DCP Midstream Partners (DPM), and Boardwalk Pipeline Partners (BWP) are some other AMZ constituents that have high percentages. Next, we’ll have a look at how the Eagle Ford Production decline affects NuStar Energy.