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What Short Interest in Stanley Black & Decker Suggests

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SWK’s short interest

Data from February 28, 2018, shows that Stanley Black & Decker’s (SWK) short interest has fallen since the beginning of 2018. The data showed that bearishness in the stock has fallen. However, the stock price has also decreased due to global market corrections in February. As of February 28, 2018, SWK’s short interest as a percentage of outstanding shares was 1.2%. Its short interest fell from 1.4% on December 29, 2017, and its stock price fell from $169.70 to $159.20.

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The decline in short interest was primarily due to the company’s better-than-expected 4Q17 earnings and fiscal 2018 earnings guidance. SWK expects fiscal 2018 adjusted EPS (earnings per share) of $8.30–$8.50, an increase of 11%–14% year-over-year. It expects its EPS to be mainly driven by acquisitions and organic growth.

Short interest ratios: SWK and peers

SWK’s short interest stands at ~1.9 million shares and its average trading volume is ~1.1 million shares, meaning its short interest ratio is ~1.6x. It would require approximately two days to cover all of its short positions. SWK’s peers’ short interest data is as follows:

  • Danaher’s (DHR) short interest is 5.2 million shares and its average trading volume is 2.6 million shares, meaning its short interest ratio is ~2.0x.
  • 3M’s (MMM) short interest is 11.5 million shares and its average trading volume is 5.1 million shares, meaning it would take two days to cover all of its short positions.
  • General Electric’s (GE) short interest ratio is ~1.5x, meaning it would take two days to cover all of its short positions.

Investors can indirectly hold SWK through the PowerShares DWA Consumer Staples Momentum Portfolio ETF (PSL), which had a 3.4% exposure to Stanley Black & Decker as of March 13, 2018.

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