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Which Midstream Stocks Are Investors Most Bearish On?

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Oct. 4 2016, Updated 2:04 p.m. ET

Midstream stocks with high short interest

On October 3, 2016, EnLink Midstream (ENLC) had a short interest-to-equity float ratio of 10.7%—the highest among all of the midstream stocks. One month ago, the ratio was 9.9%. Three months ago, it was 11.3%. In the last three months, ENLC stock has fallen 1.5%.

The fact that EnLink Midstream stock has risen even though short interest in the stock remains high could explain why the implied volatility in the stock is so high. Stock prices can move violently as shorts and longs slug it out or when shorts need to unexpectedly cover.

The company’s net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) ratio is 4.7x. Its cash and cash equivalents were $20.8 million in 2Q16. In the past month, the stock fell 5.1%. The short interest-to-equity float rose from 9.9% to 10.7%

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Cheniere Energy Partners

Currently, Cheniere Energy Partners’ (CQP) short interest-to-equity float is 8.3%. One month ago, it was 5.7%. Three months ago, it was 6%. In the last three months, the stock has fallen 2.7%. In last three months, the short interest-to-equity float rose. Its net debt-to-EBITDA ratio was 170.3x in 2Q16. Its cash and cash equivalents were $462.7 million in 2Q16.

Tallgrass Energy Partners

Tallgrass Energy Partners’ (TEP) short interest-to-equity float is 7.6%. One month ago, it was 8.7%. Three months ago, it was 7%. Its net debt-to-EBITDA ratio was 2.6x. Tallgrass Energy Partners’ cash and cash equivalents were $1.9 million at the end of 2Q16. The stock returned 2.5% in the last three months. Currently, the short interest-to-equity float ratio is higher than the levels in the past three months.

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NuStar Energy

NuStar Energy’s (NS) short interest-to-equity float is 5.8%. One month ago, it was 5.8%. Three months ago, it was 5.6%. Its net debt-to-EBITDA ratio was 5.7x. Its cash and cash equivalents totaled $130.0 million at the end of 2Q16. The stock has returned -0.2% in the last three months. The returns and short interest-to-equity float were almost steady in the last three months.

Valero Energy Partners

Valero Energy Partners’ (VLP) short interest-to-equity float is 5.4%. One month ago, it was 5.4%. Three months ago, it was 3%. Its cash and cash equivalents totaled $67.2 million at the end of 2Q16. The stock fell 8.6% in the last three months, along with a rising short interest-to-equity float ratio. Its net debt-to-EBITDA ratio was 3x.

Boardwalk Pipeline Partners (BWP) and NGL Energy Partners (NGL) have short interest-to-equity float ratios of 3.5% and 2.2%, respectively.

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