Short interest in Schlumberger
As of July 14, 2017, short interest in Schlumberger (SLB) stock as a percentage of float was ~1.6% compared to 1.2% on March 31, 2017. There has been a 33.0% rise in short interest in SLB stock since March 31, 2017. SLB stock and short interest as a percentage of float have been inversely related since July 14, 2015, as you can see in the graph below.
Implications of short interest
Since March 31, 2017, SLB stock has fallen 14.0%. The price of crude oil has turned bearish since March 2017, falling 8.0% from March 1–July 14, 2017. Investor sentiment toward the energy market has also weakened recently, leading to the stocks of many oilfield services companies turning bearish in the past four months. Schlumberger makes up 15.7% of the iShares US Oil Equipment & Services ETF (IEZ). The energy sector makes up 6.0% of the S&P 500 index (SPX-INDEX), which has risen 4.0% since March 31, 2017.
Short interest in Schlumberger’s peers
Since March 31, 2017, short interest in Oil States International (OIS) has risen 2.0%, while OIS stock has fallen 17.0%. Short interest in McDermott International (MDR) has risen 8.0% since March 31, 2017, while its stock has risen 12.0%. Short interest in Key Energy Services (KEG) has risen a whopping 242.0% since March 31, 2017, while its stock has fallen 17.0%. In general, if short interest rises as a percentage of float, more investors expect the stock to fall.
Next, we’ll look at SLB’s correlation with crude oil.