Will U.S. Steel Crush the Shorts Even More?

steelDespite U.S. Steel (NYSE:X) seeing revenue fall by 11% year-over-year to $2.58 billion for the period, the company was able to beat EPS loss estimates by $0.18. 2016 has been a stellar year for the steel-maker, with the stock now gaining over 200% year-to-date.

X cites its improving cost structure which continue to drive increases in its margins and the recent increases in steel prices started are starting to be reflected in the results.

Looking at this long-term chart of the stock, it’s certainly far from celebration for investors that chased the stock’s all-time highs back in 2008, but recent buyers have certainly liked the returns they’ve been getting.

X-2016-07-27

When you dig deep into the short interest percentages, you will see a very high percentage of traders are not buying into the stocks run and the stock’s float is sitting at nearly 30% short. This equates to a 3.1 days to cover ratio. For those who are piling into this crowded area, the hope is the markets don’t buy into the steelmaker’s run. For now, the short side seems to be losing the bet.

X-short-squeeze
Short interest courtesy of ShortSqueeze.com

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