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3M’s Short Interest Continues to Be Stable: What Does That Mean?

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Short interest in 3M

The latest data as of May 31 show that 3M’s (MMM) short interest is range-bound in 2018. As of January 12, 3M’s short interest as a percentage of outstanding shares stood at 1.4%. Its short interest has fallen to 1.3% as of May 31. During that period, the stock fell 19.3%.

Despite falling stock, sentiments remain strong

Although 3M stock has fallen more than 20% from its all-time high of $258, positive sentiment remains. 3M is still one of the best among many industrial stocks, with projected adjusted EPS growth of 15% for the next year. Its continued revenue growth in all its reporting segments indicates strength. With continued effort of business integration, 3M has been able to achieve more operational efficiency, and the results will reflect gradually. Its second-quarter earnings will give more direction on where the stock is headed and what the sentiments are.

Short interest ratio

In terms of the number of shares, 3M’s short interest is ~7.7 million shares. Its average trading volume is ~2.9 million shares. As a result, its interest ratio is ~2.7x, which indicates that it requires three days to cover all the short positions in 3M. Below are the short interest ratios of 3M’s peers:

  • Honeywell’s (HON) short interest is ~7.3 million, while the average number of shares traded is 2.7 million. The short interest ratio is ~2.7x, which indicates that it will take three days to cover the short positions.
  • General Electric’s (GE) short interest is 146.9 million. The average number of shares traded is 67.9 million, which indicates that it will take two days to cover the short positions.
  • Caterpillar’s (CAT) short interest ratio stands at 1.8x, which means it will take two days to cover the short positions.

Investors can invest in 3M indirectly by investing in the iShares U.S. Industrials ETF (IYJ). IYJ invests 3.4% of its portfolio in 3M as of June 25.

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