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Midstream Stocks with High Short Interest: Do You Own Any?

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Nov. 20 2020, Updated 2:09 p.m. ET

Midstream stocks with high short interest

On January 3, 2017, EnLink Midstream (ENLC) had a short interest-to-equity float ratio of 8.9%. That’s the highest among all midstream companies that are part of the Alerian MLP ETF (AMLP). One month ago, the ratio was 7.7%. Three months ago, it was 9.9%.

In the last three months, EnLink Midstream rose 18.2%. Its short interest-to-equity float ratio fell 9.8%. The company’s net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) ratio was 4.5x. Its cash and cash equivalents were $18.0 million in 3Q16. EnLink Midstream is one of the high implied volatility companies we looked at in Part 1 of this series.

High short interest in a stock can show the market’s expectation of a large fall. Expectations of large movements in a stock can cause its implied volatility to rise.

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Dominion Midstream Partners

Dominion Midstream Partners’ (DM) short interest-to-equity float is 6.9%. One month ago, it was 4.2%. Three months ago, it was 5.3%. Its cash and cash equivalents were $35.0 million at the end of 3Q16. DM stock has risen 21.1% in the last three months. Its short interest-to-equity float ratio has risen 30.8%. Its net debt-to-EBITDA ratio is 1.1x.

Tallgrass Energy Partners

Tallgrass Energy Partners’ (TEP) short interest-to-equity float is 5.9%. One month ago, it was 6.4%. Three months ago, it was 7.9%. Its net debt-to-EBITDA ratio is 4.1x.

TEP’s cash and cash equivalents were $1.6 million at the end of 3Q16. In the last three months, the stock has fallen 2.3%. Its short interest-to-equity float has fallen 25.6%.

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NuStar Energy

NuStar Energy’s (NS) short interest-to-equity float is 5.8%. One month ago, it was 6.0%. Three months ago, it was 6.7%. Its net-debt-to-EBITDA ratio is 5.4x.

The company’s cash and cash equivalents were $118.9 million at the end of 3Q16. In the past three months, NuStar Energy stock has risen 3.0%. Its short interest-to-equity float ratio has fallen 13.5%.

Energy Transfer Equity

Energy Transfer Equity’s (ETE) short interest-to-equity float is 4.9%. One month ago, it was 5.2%. Three months ago, it was 5.0%. Its net debt-to-EBITDA ratio is 7.9x.

Its cash and cash equivalents were $606.0 million at the end of 3Q16. In the last three months, the stock has risen 14.7%, while its short interest-to-equity float has fallen 0.20%.

Generally, we see an inverse relationship between the short interest-to-equity float ratio and the three-month price movements of a stock.

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