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Why Sherwin-Williams’s Short Interest Is Rising Again

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Sherwin-Williams’s short interest

The latest short interest report on September 15 indicated that Sherwin-Williams’s (SHW) short interest reached a one-month high. According to the latest report, the company’s short interest as a percentage of outstanding shares rose to 1.92% from 1.57% on a sequential basis. At the same time, the stock price increased from $455.58 to $467.98 during the same period.

Sherwin-Williams’s strong second-quarter earnings and the upward revision to the fiscal 2018 adjusted EPS boosted the stock price. Many analysts have also increased their target price for Sherwin-Williams. However, many analysts think that the stock is overvalued. As the price continues to increase, it’s paving the way for bears and more negative sentiments. The short interest is expected to increase. The stock hit an all-time high of $477.8 on September 20.

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Short interest ratios

Sherwin-Williams’s short interest is 1.79 million shares. The company’s average trading volume is 0.6 million shares, which implies a short interest ratio of 3.0x. The figure indicates that it would require approximately three days to cover all of the short positions. Peers’ figures are as follows:

  • PPG Industries’ (PPG) short interest is 7.2 million shares. The average number of shares traded is 1.45 million, which implies a short interest ratio of 5.0x. The figure indicates that it would take approximately five days to cover all of the short positions.
  • RPM International’s (RPM) short interest is 4.16 million shares. The average number of shares traded is 1.32 million, which implies that it would take three days to cover all of the short positions.
  • Axalta’s (AXTA) short interest ratio is 3.4x, which implies that it would take approximately three days to cover all of the short positions.

Investors could hold Sherwin-Williams indirectly by investing in the Invesco Russell Top 200 Pure Growth ETF (PXLG). PXLG has invested 2.6% of its portfolio in Sherwin-Williams as of September 25.

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