Apr 8, 2016

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The Basic Materials Sector Shorts Report: Cabot Oil & Gas Corporation (COG), Tahoe Resources Inc. (TAHO), Southwestern Energy Company (SWN)

The Basic Materials Sector Shorts Report: Cabot Oil & Gas Corporation (COG), Tahoe Resources Inc. (TAHO), Southwestern Energy Company (SWN)

Short interest is a measure of how many shares of any given security have been sold short in a period of time. Typically, a stock exchange produces a monthly report on the total amount of short interest in any given stock. This number is expressed as a percentage of stocks sold short which have not yet been covered compared to the total outstanding shares of the stock. The higher the short interest, the more investors are betting the stock will fall in price. However, a very high short interest can be the predecessor to a rise in stock price.

A stock’s short interest ratio (SIR) indicates how many trading days it would take to cover (i.e., buy back) all existing shorted shares at the stock’s average daily trading volume. To arrive at this number, the total short interest on a given stock is divided by the equity’s typical daily volume.

As with the short-to-float ratio, there’s no distinct line in the sand — but a SIR at or above 5.00 is generally considered noteworthy, since that figure suggests it would take a week for all of the existing short positions to be covered.

Short interest data is released on a semi-monthly basis by the major U.S. Exchanges, with new data coming out around the second and fourth week of each month. Accordingly, each reporting period covers a roughly two-week span of time.

If the number of shorted shares declined during the latest two-week period, it suggests the short sellers have been buying back their bearish bets. Conversely, an increase in the number of shares sold short reveals that new pessimistic positions have been created.

As of 15/03/2016 short interest for Cabot Oil & Gas Corporation (COG) stood at 19376261 shares, an increase of 128882 shares or 0.67 percent compared to 19247379 shares on 01/03/2016. This short interest comprises 4 percent of the entire float. Short interest ratio now stands at 1.86 at the average volume of 10410613 shares.

According to the latest short-interest data for the two-week period ended 15/03/2016 short interest for the stock of Tahoe Resources Inc. (TAHO) increased from 6669389 shares at the end of the settlement date of 01/03/2016 to 6944134 shares, marking a growth of 274745 shares or 3.96 percent. The current short interest accounts for 3.15 percent of the company’s total outstanding common shares and the days-to-cover short interest ratio, on the other hand, is 3.461366 as of 15/03/2016 assuming average daily trading volume of 2006183 shares.

Short interest for the shares of Southwestern Energy Company (SWN) fell -5.92 percent from 97187461 shares on 01/03/2016 to 91754584 shares on 15/03/2016. Investors have taken short positions on 24 percent of the total common shares of the stock that are floating on the exchange. The days-to-cover short interest ratio is now at 3.2846 days. It is based on average daily trading volume of 27934784 shares.

 

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