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Short Interest in Integrated Energy Stocks XOM, CVX, RDS.A, BP

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Mar. 5 2018, Updated 7:31 a.m. ET

Short Interest in integrated energy stocks

In the previous part, we analyzed integrated energy stocks in terms of forward valuations. Now we’ll look at changes in short interest.

ExxonMobil (XOM), Chevron (CVX), Royal Dutch Shell (RDS.A), and BP (BP) have witnessed a mixed trend in their short interest (percentage of outstanding shares) changes from December 29, 2017, to January 31, 2018. Short interest in XOM and CVX rose 0.03% each over December 29, 2017, to 0.82% and 1.2%, respectively, on January 31, 2018. That shows that the bearish sentiment for the stocks has increased. However, during the same period, short interest in Shell and BP fell 0.01% and 0.04%, respectively, over December 29, 2017, to 0.15% and 0.16%, respectively, on January 31, 2018.

From December 29, 2017, to January 31, 2018, the stocks of XOM, CVX, Shell, and BP rose. The stock prices of XOM and CVX rose 4.4% and 0.1%, respectively, in the same period. Shell and BP stocks rose 5.3% and 1.8%, respectively.

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Why a mixed trend in bearish sentiment?

Integrated energy stocks have recently announced their 4Q17 earnings. While ExxonMobil and Chevron missed their earnings estimate, Shell and BP surpassed them.

In 4Q17, XOM’s revenues missed Wall Street estimates by 11%. The company’s 4Q17 reported EPS (earnings per share) was $1.97. After adjusting it for tax benefits due to US tax reforms and asset impairments, ExxonMobil’s adjusted EPS stood at $0.88, about 15% lower than the estimated EPS of $1.04. XOM’s 4Q17 adjusted EPS was 2% lower YoY (year-over-year) than its 4Q16 adjusted EPS.

Similarly, Chevron’s adjusted EPS stood at $0.72 in 4Q17, missing the estimated EPS of $1.22 by a whopping ~41%.

That could have led to the rise in short interest for XOM and CVX. In the next part, we’ll do a beta comparison for our integrated energy stocks.

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