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Short Interest in Suncor Surges, but Its Stock Rises 22%

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Mar. 20 2019, Updated 2:28 p.m. ET

Short interest in Suncor

Short interest (as a percentage of outstanding shares) in Suncor Energy (SU) has risen 0.1% since January 2, 2019, the beginning of the first quarter, to its current level of 0.7%. 

Usually, a rise in short interest implies an increase in the bearish sentiments in a stock. In the first quarter, Suncor stock has risen 21.5%.

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Why the change in sentiments?

The rise in bearish sentiments in Suncor stock may have been the result of its lower-than-expected fourth quarter earnings results and its expectation of weaker first-quarter earnings.

Suncor’s fourth-quarter earnings missed Wall Street analysts’ estimates. Its adjusted EPS of 0.36 Canadian dollars fell short of analysts’ consensus estimate of 0.45 Canadian dollars.

In the first quarter of 2019, though oil prices have risen, they’re still lower on a quarterly average basis. WTI, the benchmark oil, is down ~14% YoY (year-over-year) so far. Thus, lower oil prices could affect Suncor’s upstream earnings in the quarter. Analysts expect Suncor’s EPS to fall 28% YoY to 0.43 Canadian dollars in the quarter.

Peers’ short interests

Short interest in Suncor’s peer Eni (E) has risen 0.01% since January 2 to its current level of 0.2%. ExxonMobil’s (XOM) and Total’s (TOT) short interests have risen 0.05% and 0.07%, respectively, since January 2 to 0.8% and 0.1%, respectively. If we review their stock prices, we’ll find that Eni, ExxonMobil, and Total have risen 14.1%, 16.0%, and 9.3%, respectively, since January 2.

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