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What Does 3M’s Short Interest Suggest ahead of Q3 Earnings?


Oct. 22 2018, Updated 9:01 a.m. ET

3M’s short interest

The latest short interest report from September 27 suggests that 3M’s (MMM) short interest is showing signs of an upward trend. According to the most recent release, 3M’s short interest was 1.45% of outstanding shares, indicating a third consecutive increase.

The increase in short interest suggests an increase in the negative sentiment towards the stock. Based on recent stock price movement, short interest begins to build as the stock price goes beyond $207 and short interest falls below these levels, suggesting that the shorts are covered below $207 levels. As a result, 3M’s stock price has remained range-bound in the past two months. A strong third quarter might help to improve the short interest level, as traders will be forced to cover their shorts. On the other hand, if 3M fails to meet Wall Street expectations, the short interest might continue to build and attract bears.

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Short interest ratio

In terms of the number of shares, 3M’s short interest is ~8.52 million shares. The company’s average trading volume is ~2.25 million shares. As a result, 3M’s short interest ratio is ~3.8x. The ratio indicates that it would require four days to cover all of the short positions in 3M. Below are the short interest ratios for 3M’s peers:

  • Honeywell’s (HON) short interest is ~5.88 million, while the average number of shares traded is 2.8 million. The short interest ratio is ~2.1x, which indicates that it will take two days to cover the short positions.
  • General Electric’s (GE) short interest is 123.79 million. The average number of shares traded is 72.67 million, which indicates that it will take two days to cover the short positions.
  • Caterpillar’s (CAT) short interest ratio stands at 1.7x, which means that it will take two days to cover the short positions.

Investors could hold 3M indirectly by investing in the iShares MSCI USA ESG Select ETF (SUSA). SUSA invests 3.7% of its portfolio in 3M as of October  18.


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