When considering stocks, it's always helpful to gauge what the rest of the market thinks. One source for that is the number of shares shorted. Companies seeing significant increases in shares shorted are being viewed more negatively, and vice-versa.
We ran a screen on the oil & gas sector for stocks seeing the most significant decreases in shares shorted month-over-month. This indicates that a growing number of short sellers are no longer bearish on these names.
A Closer Look
We looked at Northern Oil and Gas, Inc. (NYSEMKT:NOG) more closely. As of December 31st, 2013, the company has cash and cash equivalents of $13 million, and $226 million available on its revolving credit facility. The liquidity cushion helps position the company for increased drilling activity in 2013.
The stock is trading around $14.36 versus its 52-week high of $26.12, down 40% in the past 1-year. The S&P Oil & Gas Exploration & Production ETF (NYSEARCA:XOP) is up 2.69% in the past 1-year, and up 10% year-to-date.
Do you think its time for Northern Oil and gas to show a similar perfomance?
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
Do you think these stocks will outperform too? Use this list as a starting point for your own analysis.
1. Hornbeck Offshore Services, Inc. (NYSE:HOS): Operates offshore supply vessels (OSVs), multi-purpose support vessels, and a shore-base to provide logistics support and specialty services to the offshore oil and gas exploration and production industry primarily in the United States and Gulf of Mexico.
- Market cap at $1.58B, most recent closing price at $44.61.
- Shares shorted have decreased from 2.64M to 2.10M over the last month, a decrease which represents about 1.72% of the company's float of 31.39M shares. Days to cover ratio at 3.81 days.
2. CVR Energy, Inc. (NYSE:CVI): Refines and markets transportation fuels in the United States.
- Market cap at $4.89B, most recent closing price at $56.34.
- Shares shorted have decreased from 1.76M to 1.12M over the last month, a decrease which represents about 4.39% of the company's float of 14.59M shares. Days to cover ratio at 2.79 days.
3. Key Energy Services Inc. (NYSE:KEG): Operates as an onshore rig-based well servicing contractor.
- Market cap at $1.33B, most recent closing price at $8.82.
- Shares shorted have decreased from 7.87M to 6.36M over the last month, a decrease which represents about 1.17% of the company's float of 129.32M shares. Days to cover ratio at 2.42 days.
4. Northern Oil and Gas, Inc. : Engages in the acquisition, exploration, development, and production of crude oil and natural gas properties in the Williston basin, the United States.
- Market cap at $946.49M, most recent closing price at $14.91.
- Shares shorted have decreased from 10.35M to 9.59M over the last month, a decrease which represents about 1.31% of the company's float of 57.86M shares. Days to cover ratio at 15.06 days.
*Short data sourced from Yahoo! Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Business relationship disclosure: Business relationship disclosure: Kapitall is a team of analysts. This article was written by Sabina Bhatia, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.