Short Interest in DCP Midstream Is above the Industry Average


Jan. 11 2017, Updated 9:06 a.m. ET

Short interest in DCP Midstream

Short interest in DCP Midstream Partners (DPM) as a percentage of float ratio fell to 2.8%. This ratio is lower than the 2016 average of 4.4%. Moreover, it is lower than the historical three-year average of 4.1%. This could indicate a bullish sentiment.

The above chart shows the one-year closing price and short interest as a percentage of float for DPM. Short interest is the number of shares sold short, and short interest as a percentage of float is the number of shares sold short divided by floating shares.

A high percentage of short interest, or an increase in short interest, generally indicates pessimism about the stock. However, this might not necessarily result in a stock price decline as short position holders try to cover their short positions, which could result in a stock rally.

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Industry average

The Alerian MLP Index (AMZ), which tracks 50 energy MLPs, has an average short interest as a percentage of float of ~2.5%. Short interest in DPM as a percentage of float ratio is above the industry average.

Sunoco LP (SUN), Tallgrass Energy Partners (TEP), and Golar LNG Partners (GMLP) are among the AMZ constituents that have the highest short-interest-to-float ratios.

Put-call ratio

The put-call ratio is another measure to look at investors’ sentiment toward a stock. A high put-call ratio could indicate that a large number of investors expect the stock price to fall in the future and vice versa. DPM has a put-call ratio of 0.9.


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