Short interest in Basic Energy Services
Short interest in Basic Energy Services (BAS) as a percentage of its float was 4.4% as of May 8 compared to 4.6% as of March 31, 2017. Since the end of 1Q17, short interest in BAS has fallen 4%. As noted in the graph below, BAS’s stock price and short interest as a percentage of float have largely been inversely related since February 2017.
Implications of short interest in Basic Energy Services
Short interest is the number of shares sold short divided by the number of shares outstanding. A fall in short interest as a percentage of float, or a fall in short interest, indicates that fewer investors expect the stock’s price to fall. Since March 31, 2017, BAS’s stock price has fallen ~18% despite the fall in short interest. BAS makes up 0.01% of the iShares Micro-Cap ETF (IWC).
However, investors should note that the market could go against investors’ sentiment. Also, share price could increase when investors start buying the stock to cover their short positions.
Next, we’ll look at Wall Street’s recommendations for BAS.