uploads///Part  Short interest

DowDuPont’s Short Interest Increases: Is That Alarming?

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May. 31 2018, Updated 6:31 a.m. ET

DowDuPont’s short interest

The latest short interest data as of May 15 showed that DowDuPont’s (DWDP) short interest has risen sequentially on the back of its first-quarter earnings. According to the data, its short interest as a percentage of outstanding shares was 0.90%. Its short interest increased from 0.78% on May 7. For the same period, DWDP stock rose from $64.92 to $67.15.

DWDP’s marginal increase in short interest could be attributed to lower revenue for the agricultural segment due to weather issues in the first quarter. Another reason could be the proposed Chinese tariffs on US exports. Dow is one of the companies that would be affected by the tariffs.

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Short interest ratio for DowDuPont and its peers

In terms of the number of shares, DowDuPont’s short interest was ~21.1 million shares. Its average trading volume was ~8.9 million shares, which means a short interest ratio of ~2.4x. It takes two days to cover all its short positions. Below are the short interest ratios for DowDupont’s peers.

  • Monsanto’s (MON) short interest is ~6.8 million shares. The average number of shares traded is ~4 million. Its short interest ratio is ~1.7x, which indicates that it will take two days to cover all its short positions.
  • Mosaic’s (MOS) short interest is ~13.2 million shares, while its average number of shares traded is ~4.5 million. It will take three days to cover all its short positions.
  • Eastman Chemical’s (EMN) short interest ratio is ~4.0x. It will take four days to cover all its short positions.

Investors can hold DowDuPont indirectly by investing in the Vanguard Materials ETF (VAW). VAW has invested 16.6% of its portfolio in DowDuPont as of May 29.

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