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Analyzing Short Interest in Williams ahead of 4Q16 Earnings

Kurt Gallon - Author
By

Aug. 18 2020, Updated 5:15 a.m. ET

Short interest in WMB and WPZ

Short interest in Williams Companies (WMB) as a percentage of shares outstanding has fallen to 1.4%. That’s lower than the 2016 average of 2.8%. It’s also lower than the historical three-year average of 2.5%. That could indicate a bullish sentiment.

Similarly, short interest in Williams Partners (WPZ) of 1.4% is also below the three-year historical average of 2.5%.

The above graph shows short interest as shares outstanding for WMB. Short interest is the number of shares sold short, whereas short interest as a percentage of outstanding shares is the number of shares sold short divided by outstanding shares. A high percentage of short interest or a rise in short interest could indicate pessimism for the stock. However, that might not necessarily result in a fall in the stock since short position holders try to cover their short positions, which might 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 shares outstanding of ~3.2%. Short interest in both WMB and WPZ as a percentage of shares outstanding is lower than the industry average.

Sunoco (SUN), Golar LNG Partners (GMLP), Valero Energy Partners (VLP), and Tallgrass Energy Partners (TEP) are among the AMZ constituents that have high short interest to shares outstanding ratios.

Put-call ratio

Put-call ratio is another measure of investor sentiment for a stock. A high put-call ratio might indicate that a lot of investors expect the stock to fall in the future, and vice versa. WPZ has a low put-call ratio of 0.30.

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