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Top Five Midstream Stocks with High Short Interest

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Midstream stocks with high short interest

On October 10, 2016, EnLink Midstream (ENLC) had a short interest-to-equity float ratio of 10.7%. It was the highest among all the midstream companies that are part of the Alerian MLP ETF (AMLP). One month ago, the ratio was 9.9%. Three months ago, it was 11.3%. In the last three months, ENLC stock has risen 3.9%.

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. We discussed implied volatilities for midstream stocks in Part 1. 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.

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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 risen 1.6%, and its short interest-to-equity float has risen 37%.

CQP’s net debt-to-EBITDA ratio was 170.3x in 2Q16, and its cash and cash equivalents were $462.7 million.

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 in 2Q16.

TEP’s cash and cash equivalents were $1.9 million at the end of 2Q16. The stock returned 9.8%, while its short interest-to-equity float has risen 7.8% in the last three months. Currently, its short interest-to-equity float ratio is higher than its 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.

NS stock has risen 0.9%, and its short interest-to-equity float ratio has risen 2.6% in the last three months. Its 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.

VLP stock has fallen 4.6% in the last three months, along with a rise of 77.8% in its 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 2.7%, respectively.

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