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Which Oilfield Services Stocks Lead in Short Interest?

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Oilfield services stocks with high short interest

As of October 11, 2016, Tidewater (TDW) had the highest short interest-to-equity float ratio among OFS (oilfield services) stocks that are part of the VanEck Vectors Oil Services ETF (OIH). The company’s short interest-to-equity float ratio is 37.2%. One month ago, it was 38.7%. Three months ago, it was 29.5%.

In the last three months, the stock has fallen 38.4%. During the same time, the short interest-to-equity float ratio rose 26%. It shows an inverse relationship between the short interest in a stock and its returns.

The high short interest can also help explain why Tidewater has one of the highest implied volatilities in the OFS sector. Stocks can move wildly as bulls and bears slug it out. Prices can also rise violently when shorts have to unexpectedly cover.

Tidewater’s cash and cash equivalents were $668.6 million as of 2Q16. The company’s net-debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) ratio was 6.5x.

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CARBO Ceramics

CARBO Ceramics’ (CRR) short interest-to-equity float ratio is 34.1%. One month ago, it was 34.9%. Three months ago, it was 39.3%. In the last three months, the stock has fallen 25.7%. Its short interest-to-equity float ratio fell 13.3%. The company reported operating losses in the last four quarters. Its cash and cash equivalents were $80.7 million in 2Q16.

CARBO Ceramics was also one of the top implied volatility OFS stocks that we analyzed in Part 1 of this series.

Diamond Offshore Drilling

Currently, Diamond Offshore Drilling’s (DO) short interest-to-equity float ratio is 29%. One month ago, it was 26.8%. Three months ago, it was 25.9%. In the last three months, Diamond Offshore Drilling’s stock has fallen 33%. Its short interest-to-equity float ratio rose 12.1%.

The company’s net debt-to-EBITDA ratio is 2x. Its cash and cash equivalents are $103.2 million as of 2Q16.

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Transocean

Transocean’s (RIG) short interest-to-equity float ratio is 29%. One month ago, it was 27.5%. Three months ago, it was 26.5%. The company’s net-debt-to-EBITDA ratio is 1.8x. Its cash and cash equivalents were $2.5 billion in 2Q16. In the last three months, the stock has fallen 20.3%, while its short interest-to-equity float ratio rose 9.5%.

Helmerich & Payne

Helmerich & Payne’s (HP) short-interest-to-equity float ratio is 28.4%. One month ago, it was 25.7%. Three months ago, it was 24.5%. Its net-debt-to-EBITDA ratio is -0.2x because it has cash in excess of debt. Its cash and cash equivalents were $907 million in 2Q16. The stock has fallen 0.7% in the last three months, while its short interest-to-equity float ratio rose 15.9%.

Rowan Companies (RDC) and Noble (NE) have short interest-to-equity float ratios of 19.3% and 17.8%, respectively. Noble is also among the high implied volatility stocks that we discussed in Part 1.

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