Short interest in Western Gas
Short interest in Western Gas Partners (WES) as a percentage of float has fallen to 1.2%. This ratio is lower than its 2016 average of 2.9%, and it’s lower than its historical three-year average of 2.3%. This could indicate a bullish sentiment toward WES stock.
The above chart shows the one-year closing price and short interest as a percentage of float for WES. Remember, short interest refers to the number of shares sold short, whereas short interest as a percentage of float reflects the number of shares sold short, divided by floating shares.
This means that a high percentage of short interest, or an increase in short interest, generally indicates pessimism about the stock. But this might not necessarily result in a stock price decline because short position holders generally try to cover their short positions, which can result in a stock rally.
The Alerian MLP Index (AMZ), which tracks 50 energy MLPs (master limited partnerships), has an average short interest as a percentage of float of 3.1%. This means that the short interest in WES as a percentage of float is below the industry average.
Put-call ratio is another measurement of investors’ sentiments toward a stock. A high put-call ratio might indicate that a large number of investors expect a stock price to decline in the future, and vice versa.
WES has a put-call ratio of nearly zero.