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Which Oilfield Services Stocks Lead in Short Interest?

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Dec. 4 2020, Updated 10:50 a.m. ET

Oilfield services stocks with high short interest

Currently, Diamond Offshore Drilling’s (DO) short interest-to-equity float ratio is 32.1%, the highest among the OFS (oilfield services) stocks that are part of the VanEck Vectors Oil Services ETF (OIH).

One month ago, DO’s ratio was 29%. Three months ago, it was 24.2%. In the last three months, Diamond Offshore Drilling’s stock fell 18.9%, while its short interest-to-equity float ratio rose 33%.

The company’s net debt-to-EBITDA[1. earnings before interest, tax, depreciation, and amortization] ratio is 2x. Its cash and cash equivalents were $103.2 million in 2Q16.

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Tidewater

Tidewater’s (TDW) short interest-to-equity float ratio is 29%. One month ago, it was 37.2%. Three months ago, it was 32%. In the last three months, the stock has fallen 39.4% and its short interest-to-equity float ratio fell 9.5%.

The high short interest can also help explain why Tidewater has one of the highest implied volatilities in the OFS sector. Traders pile on short positions in expectation of a large drop in stocks. Expectations of large moves in stocks can drive up their implied volatilities. Stocks can also move wildly as bulls and bears slug it out.

Tidewater’s cash and cash equivalents totaled $668.6 million in 2Q16. The company’s net debt-to-EBITDA ratio was 6.5x.

CARBO Ceramics

CARBO Ceramics’s (CRR) short interest-to-equity float ratio is 28.6%. One month ago, it was 34.1%. Three months ago, it was 36.9%. In the last three months, the stock fell 49.9%. Its short interest-to-equity float ratio fell 22.4%. Its cash and cash equivalents totaled $80.7 million in 2Q16.

CARBO Ceramics has reported operating losses in the last four quarters. The company was also one of the top implied volatility OFS stocks that we analyzed in Part 1 of this series.

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Transocean

Transocean’s (RIG) short interest-to-equity float ratio is 26%. One month ago, it was 29%. Three months ago, it was 25.0%. The company’s net debt-to-EBITDA ratio is 1.8x.

RIG’s cash and cash equivalents totaled $2.5 billion in 2Q16. In the last three months, the stock rose 4.3%, while its short interest-to-equity float ratio rose 3.8%.

Helmerich & Payne

Helmerich & Payne’s (HP) short interest-to-equity float ratio is 24.5%. One month ago, it was 28.4%. Three months ago, it was 23.5%.

HP’s net debt-to-EBITDA ratio is -0.2x because it has cash in excess of its debt. Its cash and cash equivalents totaled $907 million in 2Q16. The stock rose 5.4% in the last three months, even as its short interest-to-equity float ratio rose 4.3%.

Rowan Companies (RDC) and Noble (NE) have short interest-to-equity float ratios of 20% and 18.5%, respectively. Noble is also among the high implied volatility stocks that we discussed in Part 1 of this series.

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