The stock has been a favorite target of some bears as the short-interest ratio was recently around 12.
Johnson cites short interest in May of almost 23 million shares (out of a 208.6 million share float) for a short-interest ratio of 14.
Sometimes these numbers reach astounding levels, and the most recent data, as of April 27, lists several stocks with a short interest ratio of over 50.
Over the years, I have found that even a short interest ratio as low as 5, when combined with a positive technical pattern, can set up a good trading opportunity.
As evidence of investor pessimism, Johnson cites the current Schaeffer's Open Interest Ratio for AMD, now near its highest readings in the last year, which indicates that the options investors have been favoring supersedes calls.
In utilizing the short interest data, one can look for a large percentage increase in the number of shares sold short, or the short interest ratio, which tells the number of trading days that would be needed to cover the short position.
It should be accompanied by an examination of the debt interest coverage ratio.
On's interest coverage ratio is 5.2, compared with 4.6 for TXU in America and 3.1 for Eni in Italy.
As the table below shows, these factors have enabled Nokia to maintain a healthy interest coverage ratio and quick ratio (nearly equal to the industry average), dispensing any immediate liquidity concerns.
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Based on minimal interest rates and the low ratio of employment costs to revenues, corporate earnings at least for a couple of years look growable.
The stock has 36.80% short interest, with a high short ratio of 2.70.
Worries about export earnings, given Argentina's high debt-to-export ratio, increase the interest-rate spread the country pays over United States interest rates, which have themselves risen this year.
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China has increased the reserve ratio six times and raised interest rates four times since October.
Chesapeake's ratio of operating income to interest expense in the second quarter was 2.3.
The 0.95% expense ratio may be reduced by interest income earned on cash and financial instruments since the fund will get its desired exposure with leveraged swaps while maintaining a large cash position.
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First Solar (NASDAQ:FSLR), with a short interest of 36.10% and short ratio of 2.5, has been on an extraordinary run in April after issuing revised guidance.
As the economic news worsens and profits dive, more firms will be at risk of breaching covenants on standard measures such as the ratio of debt to earnings before interest, tax, depreciation and amortisation.
This is under the 73% ratio in the early postwar years when interest rates remained low.
The weighted ratio of EBITDA less capex to cash interest, for instance, averaged 2.2x in the first quarter, which is within the recent band of 2.1-2.4x.
Cliffs Natural Resources (NYSE:CLF) has short interest of 25.80% and a high short ratio of 2.3.
Indeed, the average ratio of pro forma EBITDA less capex to cash interest of third-quarter LBOs only decreased marginally, to a still-healthy 2.4x, from 2.6x in the second quarter.
If economic growth does not return, deficit reduction proves too painful or interest rates are much higher than we assume, the debt ratio is likely to spiral upwards until default becomes all but inevitable.
Hctor Medina, Cemex executive vice president of planning and finance, says Cemex's ratio of debt to cash flow (earnings before interest, taxes, depreciation and amortization) currently stands at 3.55 and should soon fall to 3.0.
Japan, for example, can have a debt to GDP ratio of 300% and still pay it back because interest rates are barely above 0%.
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If you fear rising interest rates and prefer to keep your bond maturities short, the ratio of muni to Treasury yield is actually highest at the short end (140%-261% for one- to five- year triple-AAA paper).
In the case of Cephalon, McMillan got his "buy" signal from the put-call ratio, a measure of investor sentiment expressed as put open interest divided by call open interest.
Now Bucksbaum will hike his company's debt ratio from 56% to 70% and drive down its interest coverage (earnings before interest, taxes, depreciation and amortization divided by interest) from two to 1.6 times.
Low or falling nominal interest rates and inflation were crucial to reducing the debt-to-GDP ratio.
The Fed, ECB, BoJ, BoE, SNB and the Bank of Canada lowered interest rates 50 basis points on dollar swaps, and China lowered its required reserve ratio by 50 bps, the first cut since 2008.
In exchange for this the US government receives a lower Debt-to-GDP ratio, which affords it the option of reducing its Treasury Bill exposure should interest rates rise.
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