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Which Utility Stocks Have the Highest Short Interest?

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NRG Energy

On December 6, 2016, NRG Energy (NRG) had a short interest-to-equity float ratio of 7.4%—the highest among the utility stocks that make up the Utilities Select Sector SPDR ETF (XLU). One month ago, the ratio was 6.4%. Three months ago, it was 5.1%.

In the past three months, the stock fell 4.1%—the most among the utility stocks in the above table. NRG Energy’s short interest-to-equity float ratio rose 45.7% during this period.

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NRG Energy is also the utility stock with the highest implied volatility. It’s relatively high short interest could explain why it has one of the highest implied volatilities in the utility sector. While stocks can move wildly as the bulls and bears slug it out, high short interest in a stock implies expectations of a large fall. It can cause a stock’s implied volatility to rise.

NRG Energy’s net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) ratio is 6.5x. Its cash and cash equivalents were $2.4 billion in 3Q16.

We should note here that generally, the short interest trend in a stock and its price are inversely related and tend to move in opposite directions.

SCANA

SCANA’s (SCG) short interest-to-equity float ratio is 4%. One month ago, it was 4.1%. Three months ago, it was 3.8%. In the last three months, the stock fell 1.7%, while its short interest-to-equity float ratio rose 5%. SCANA’s net debt-to-EBITDA ratio is 4.3x. Its cash and cash equivalents were $56 million in 3Q16.

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WEC Energy

WEC Energy’s (WEC) short interest-to-equity float ratio is 3.8%. One month ago, it was 3.6%. Three months ago, it was 3.5%. In the last three months, the stock fell 9.5%, while its short interest-to-equity float ratio rose 7.8%. WEC Energy’s net debt-to-EBITDA ratio is 5.1x. Its cash and cash equivalents were $25 million in 3Q16.

NiSource

NiSource’s (NI) short interest-to-equity float ratio is 3.7%. One month ago, it was 3.8%. Three months ago, it was 3.6%. Its net debt-to-EBITDA ratio is 5.1x.

NiSource’s cash and cash equivalents were $16 million in 3Q16. In the last three months, the stock fell 11.8%, while its short interest-to-equity float ratio rose 4.3%. It’s also one of the high implied volatility stocks that we discussed in Part 1.

Consolidated Edison

Consolidated Edison’s (ED) short interest-to-equity float ratio is 3.5%. One month ago, it was 3.2%. Three months ago, it was 3.6%. Its net debt-to-EBITDA ratio is 3.7x.

Consolidated Edison’s cash and cash equivalents were $153 million in 3Q16. It fell 8.9% in the last three months, while its short interest-to-equity float ratio fell 3.1%.

CenterPoint Energy (CNP) and Duke Energy’s (DUK) short interest-to-equity float ratios are 1.9% and 1.4%, respectively.

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