Understanding the Short Interest in MPC ahead of Its 3Q17 Results



Short interest in MPC

Marathon Petroleum (MPC) has seen a rise in its short interest (as a percentage of outstanding shares) from 1.3% in mid-September to its current level of 1.9%. This implies that the bearish sentiment in the stock has risen. Over the same period, Marathon Petroleum stock has risen 7.5%.

The most notable incident that influenced refining stocks since the end of August is Hurricane Harvey, which affected Marathon Petroleum’s refineries on the US Gulf Coast. But due to the rise in refining cracks, as reflected in MPC’s refining earnings indicators, MPC  stock has gained sharply since then. We discussed these dynamics in part three of the series earlier.

Notably, the short interest trend in MPC could change after its 3Q17 results, likely because MPC is expected to report higher YoY (year-over-year) earnings in 3Q17 on the back of higher refining margins, as suggested by its refining earnings indicator trend.

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Peer short interests

Andeavor’s (ANDV) and Valero Energy’s (VLO) short interests have risen 0.2% and 0.8%, respectively, to 3.1% and 4.9%. HollyFrontier’s (HFC) and PBF Energy’s (PBF) short interests have fallen 0.7% and 5.3%, respectively, to 6.7% and 17.3%.

Since mid-September, ANDV and VLO stocks have risen 4.7% and 10.6%, respectively, while HFC and PBF stocks have risen 12.6% and 8.5%, respectively, during the same period.



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