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These Upstream Stocks Lead in Short Interest

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Upstream stocks with high short interest

On March 10, 2017, California Resources (CRC) had the highest short-interest-to-equity float ratio among the upstream stocks in the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) at ~31%.

California Resources’ short-interest-to-equity float ratio fell 16.2% over the last three months. During this period, the stock fell 21.4%. The company’s net-debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) ratio is 15.8x.

In the last four quarters, California Resources’ revenue fell 20.2%. It reported no operating income on an adjusted basis in 4Q16 compared to an adjusted operating loss of $5 million in 4Q15. California Resources’ operating profit margin is -5.5% compared to the industry median of 4.3%.

California Resources was among the high implied volatility stocks that we looked at in the previous parts of this series. Expectations of large movements in a stock can increase implied volatility. High short interest in a stock reflects traders’ expectations of downside.

Synergy Resources

Synergy Resources’ (SYRG) short interest-to-equity-float ratio is ~23.2%. Synergy Resources has fallen 24.7% in the past three months. Its short-interest-to-equity float ratio fell 20.4% during the same period.

In the last four quarters, the company increased revenue by 48.5%. It reported an adjusted operating income of $9.4 million in 4Q16 compared to an adjusted operating loss of $10.3 million in 4Q15. Synergy Resources’ operating profit margin is -12.6%.

Continental Resources

Continental Resources’ (CLR) short-interest-to-equity-float ratio is ~22.0%. Its stock fell 19% in the last three months. The stock’s short-interest-to-equity-float ratio fell 6% during the same period. Its net-debt-to-EBITDA ratio is 4.9x.

In the last four quarters, Continental Resources’ revenue fell 4.5%. It incurred an operating loss of $13.3 million in 4Q16 compared to an operating loss of $62 million in 3Q15. Continental Resources’ operating profit margin is -18.1%.

Denbury Resources

Denbury Resources’ (DNR) short-interest-to-equity float ratio is ~17.5%. In the past three months, the stock has fallen 38.6%. Its short-interest-to-equity float ratio fell 7.1% during the same period. Its net-debt-to-EBITDA ratio is 12.5x.

In the last four quarters, its revenue rose 0.7%. It reported an adjusted operating loss of $547 million in 4Q16 compared to an adjusted operating loss of $48.8 million in 4Q15. Denbury Resources’ operating profit margin is -7.5%. Denbury Resources is also among the high implied volatility stocks that we looked at in the previous parts of this series.

Sanchez Energy

Sanchez Energy’s (SN) short interest-to-equity float ratio is ~16.6%. Its net-debt-to-EBITDA ratio is 2.2x. The stock rose 8.6% in the past three months. Its short-interest-to-equity float ratio fell 13.6% during the same period. We discussed Sanchez Energy’s earnings trend in part two of this series. 

All of the above companies have seen short interest fall in the last three months.

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