uploads/2018/01/COP-WU_0101-Short-Interest-1.png

Could Falling Short Interest in COP’s Stock Mean Its Rally Will Continue?

By

Updated

Short interest in ConocoPhillips stock

As of November 30, 2017, ConocoPhillips’s (COP) total shares shorted (or short interest) stood at ~23.9 million, whereas its average daily volume was ~6.5 million. Thus, the short interest ratio for COP’s stock is ~3.67x. In the first two weeks of October 2017, the short interest ratio for COP’s stock made a 52-week high of 5.59x. ConocoPhillips’s short interest ratio has a 52-week low of 1.79x, which occurred in November 2016. For our analysis, the average daily volume was calculated for the short interest reporting period from November 16, 2017, to November 30, 2017.

Article continues below advertisement

When compared with the shares outstanding, current short interest in ConocoPhillips’s stock as a percentage of total shares outstanding is at ~2.0%. Since the start of the rally in COP’s stock in August 2017, short interest in ConocoPhillips stock as a percentage of shares outstanding has fallen from ~2.8% to ~2.0% in four months. During this period, COP’s stock has increased by ~30%. Thus, short sellers are reducing their short bets in COP’s stock as the stock price has increased, which could mean that they feel that COP’s stock rally could continue. To know more about COP stock’s recent price performance, refer to part one of this series.

Other oil and gas producers

As of November 30, 2017, other oil and gas exploration and production companies like Marathon Oil (MRO), California Resources (CRC), and Murphy Oil (MUR) have short interest ratios of ~1.6x, ~8.3x, and ~12.8x, respectively.

To learn more about ConocoPhillips’s strategic plans for the next three years, read our series on ConocoPhillips’s 2017 Analyst and Investor Meeting: Key Takeaways.

Advertisement

More From Market Realist