Jabran Kundi
3 min read
In This Article:
We recently published a list of 20 Underperforming Stocks Targeted By Short Sellers. In this article, we are going to take a look at where Delek US Holdings, Inc. (NYSE:DK) stands against other underperforming stocks targeted by short sellers.
Short interest refers to the percentage of publicly available shares that have been sold short. It is an indicator used by many investors to determine how strong a company’s bear thesis may be. Due to the nature of short selling, the short interest has become a popular indicator among investors.
The reason it is given so much weightage is that people betting against a stock have usually done solid research and are confident of a company’s downfall. They take unlimited risk, so when big investors or the smart money shorts a stock, people take notice. They try to unearth the red flags that may have prompted the high short interest.
We decided to dig deeper and try to find out where smart money sees trouble ahead. To come up with our list of 20 underperforming stocks targeted by short sellers, we looked at the worst-performing stocks of the last six months and then ranked them by the short interest.
A tanker ship at sea with a landscape of oil derricks in the background.
Short interest: 14.72%
6 months’ performance: -23.47%
Delek US Holdings, Inc. (NYSE:DK) operates a downstream energy business. It generates its revenue through the Logistics and Refining segments. The company serves independent refiners, government, oil companies, distributors, independent retail fuel operators, transportation companies, and others.
2024 proved to be a tough year for the company. It reported a 28.18% YoY annual revenue decline accompanied by a 10.5% YoY cash balance decrease. Delek‘s EBITDA went down by 108.96% YoY, indicating a significant decline. Although DK is focused on increasing cash flows in FY 2025, considering current conditions, it seems a bit challenging for the company.
Delek US Holdings, Inc. (NYSE:DK) reiterated its 2025 guidance on the earnings call yesterday. For now, the company is focused on improving cash flows through cost controls and operational improvements.
The firm has faced lower production margins per barrel of crude oil over the past few years, mainly in its El Dorado refinery. The company’s supply and wholesale segments are also struggling. Due to the decreasing demand trends, these segments generated a loss of approximately $34 million. The firm keeps expanding losses in the supply business, which is putting pressure on profits and encouraging traders to short the stock.
