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Assessing W.R. Grace’s Short Interest since the Start of 2018

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Short interest in W.R. Grace

The latest data as of February 28, 2018, show that W.R. Grace’s (GRA) short interest has been on the decline. Bearish sentiments in the stock have decreased, and the stock’s price could rise. 

As of December 29, 2017, GRA’s short interest as a percentage of its outstanding shares stood at 2.7%. Its short interest had risen to 2.1% as of February 28, 2018. During this period, the stock fell 5.6%.

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Why did GRA’s short interest fall?

GRA’s better-than-expected 4Q17 earnings and positive 2018 guidance have resulted in the decline of its short interest. GRA reported adjusted EPS (earnings per share) of $0.98 and revenue of $459.5 million in 4Q17. It also guided for 2018 adjusted EPS in the range of $3.72–$3.82, which is 9%–12% higher than in 2017.

GRA and its peers

In terms of the number of shares, GRA’s short interest is ~1.4 million shares. GRA’s average trading volume is ~0.7 million shares. As a result, GRA’s interest ratio is 2.0x, which indicates that it would take two days to cover all of the short positions in GRA. Below are the short interest ratios of GRA’s peers:

  • LyondellBasell’s (LYB) short interest is ~10.0 million, while its average number of shares traded is 2.1 million. Its short interest ratio is ~4.8x, which indicates that it would take five days to cover its short positions.
  • Olin’s (OLN) short interest is 2.4 million. The average number of its shares traded is 2.1 million, which indicates that it would take one day to cover its short positions.
  • Eastman Chemical’s (EMN) short interest ratio is 3.8x, which means that it would take four days to cover its short positions.

Investors can hold GRA indirectly by investing in the iShares Morningstar Mid-Cap ETF (JKG). VIS has invested 0.3% of its portfolio in GRA as of March 14, 2018.

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