How Refining Stocks’ Short Interests Trended in Q2



Short interest in refining stocks

The short interests (percentage of outstanding shares) in Marathon Petroleum (MPC), Valero Energy (VLO), Phillips 66 (PSX), and HollyFrontier (HFC) have put up mixed trends since April 1, 2019.

While Valero’s, Phillips 66’s, and HollyFrontier’s short interests have fallen, Marathon Petroleum’s short interest has risen.

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Short interests in VLO, PSX, and HFC

Valero’s and Phillips 66’s short interests have fallen 0.3 and 0.4 percentage points, respectively, from April 1, 2019, to their latest levels of 1.5% and 1.1%, respectively. Usually, a drop in short interest means a decline in the bearish sentiments in a stock. In the stated period, Valero stock rose 0.9%, but Phillips 66 stock fell 1.7%. Short interest in HollyFrontier fell 1.4 percentage points to 3.6%. HFC fell 6.1% in the period.

Positive sentiments in Valero rose likely due to its better-than-expected first-quarter earnings results, strong financials, and growth activities. Valero’s adjusted EPS stood at $0.34 in the first quarter, 48% higher than the estimate of $0.23. Valero’s financial position stood strong despite weaker numbers in the quarter. The company had favorable debt and liquidity positions in the quarter. It also has a series of ongoing projects that are expected to expand its Refining and Logistics segments.

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The decrease in short interest in HollyFrontier could be the result of its higher-than-expected first-quarter revenue and earnings and better crack conditions. Holly Frontier’s first-quarter earnings, though weak, surpassed Wall Street’s estimate. HollyFrontier’s adjusted EPS of $0.54 stood higher than analysts’ estimate of $0.43. Also, in the first quarter, the company’s revenue of $3.9 billion surpassed analysts’ mean estimate of $3.3 billion. In the second quarter, Holly Frontier’s index values rose across its operating regions, supporting the positive sentiments in its stock.

Phillips 66’s better-than-expected earnings also supported the positive sentiments in its stock. PSX’s adjusted EPS stood at $0.40 in the first quarter, which exceeded Wall Street analysts’ estimate of $0.34.

Short interest in MPC rises

In the first quarter, Marathon Petroleum reported EPS of -$0.01. However, after adjusting for special benefits related to gains, tax adjustments, and transaction costs, MPC’s EPS stood at -$0.09, short of the consensus estimate of $0.05. Lower-than-expected first-quarter earnings could have affected its short interest position.


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