Short interest in Weatherford International
Weatherford International’s (WFT) short interest as a percentage of float was 14.1% as of April 7, 2017, compared to 10.5% as of December 30, 2016. Since the end of 4Q16, WFT’s short interest has risen 34.0%. As you can see in the graph below, WFT stock and short interest as a percentage of float have been inversely related in the past three years.
WFT makes up 3.5% of the iShares US Oil Equipment & Services (IEZ). WFT is also 0.03% of the iShares Russell 3000 (IWV). The energy sector makes up 6.1% of IWV, which tracks the Russell 3000 Index (RUA-INDEX). The index is composed of 3,000 large US companies. The RUA-INDEX rose 16.0% in the past year compared to a fall of 12.0% in WFT stock.
Implications of short interest in Weatherford International
Short interest is the number of shares sold short divided by the number of shares outstanding. A rise in short interest as a percentage of float, or a rise in short interest, indicates that more investors expect the stock’s price to fall. Since December 30, 2016, WFT stock has risen ~27.0%, despite the rise in short interest.
However, investors should note that the market could go against investor sentiment. The stock could rise if investors start buying the stock to cover their short positions.
You can find out more about the OFS (oilfield services and equipment) industry in Market Realist’s What Oilfield Services Companies’ Forward Multiples Indicate.