Short Interest in Mercer International Inc. (NASDAQ:MERC) Grows By 67.5%

Key Points

• Mercer International Inc. experienced a significant increase in short interest, rising 67.5% to 1,960,000 shares by August 15, indicating heightened bearish sentiment.
• The company reported a disappointing earnings result with an EPS of ($1.29), missing estimates by ($0.56), alongside revenue that fell short of expectations at $453.52 million.
• Insider activity shows confidence, with CEO Juan Carlos Bueno purchasing 8,000 shares at $3.77 and major shareholder Peter R. Kellogg acquiring 760,000 shares at an average price of $3.25.

Mercer International Inc. (NASDAQ:MERC - Get Free Report) TSE: MRI.U was the target of a large growth in short interest in the month of August. As of August 15th, there was short interest totaling 1,960,000 shares, a growth of 67.5% from the July 31st total of 1,170,000 shares. Approximately 5.3% of the shares of the company are sold short. Based on an average trading volume of 797,700 shares, the short-interest ratio is presently 2.5 days. Based on an average trading volume of 797,700 shares, the short-interest ratio is presently 2.5 days. Approximately 5.3% of the shares of the company are sold short.

Mercer International Stock Performance

NASDAQ:MERC traded down $0.15 during mid-day trading on Wednesday, hitting $3.05. 641,332 shares of the company traded hands, compared to its average volume of 597,801. The company has a quick ratio of 1.73, a current ratio of 3.10 and a debt-to-equity ratio of 3.42. The stock's fifty day moving average price is $3.39 and its 200-day moving average price is $4.38. The firm has a market cap of $204.29 million, a price-to-earnings ratio of -1.87 and a beta of 1.05. Mercer International has a one year low of $2.59 and a one year high of $8.28.

Mercer International (NASDAQ:MERC - Get Free Report) TSE: MRI.U last posted its quarterly earnings data on Thursday, July 31st. The basic materials company reported ($1.29) EPS for the quarter, missing the consensus estimate of ($0.73) by ($0.56). The company had revenue of $453.52 million during the quarter, compared to the consensus estimate of $514.46 million. Mercer International had a negative return on equity of 23.88% and a negative net margin of 5.60%. Research analysts anticipate that Mercer International will post -0.29 earnings per share for the current fiscal year.

Insider Transactions at Mercer International

In related news, major shareholder Peter R. Kellogg purchased 760,000 shares of the company's stock in a transaction dated Tuesday, July 22nd. The shares were purchased at an average price of $3.25 per share, with a total value of $2,470,000.00. Following the acquisition, the insider directly owned 2,300,000 shares in the company, valued at $7,475,000. The trade was a 49.35% increase in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Director Linda J. Welty acquired 10,000 shares of the firm's stock in a transaction dated Monday, August 18th. The shares were bought at an average cost of $3.09 per share, with a total value of $30,900.00. Following the completion of the acquisition, the director directly owned 36,290 shares of the company's stock, valued at $112,136.10. The trade was a 38.04% increase in their ownership of the stock. The disclosure for this purchase can be found here. In the last ninety days, insiders have bought 772,000 shares of company stock worth $2,506,880. Insiders own 1.00% of the company's stock.

Hedge Funds Weigh In On Mercer International

Several large investors have recently added to or reduced their stakes in the company. Quantbot Technologies LP boosted its position in shares of Mercer International by 943.3% in the first quarter. Quantbot Technologies LP now owns 20,470 shares of the basic materials company's stock worth $126,000 after purchasing an additional 18,508 shares during the period. Gamco Investors INC. ET AL bought a new position in Mercer International in the 2nd quarter worth $244,000. Jump Financial LLC increased its stake in Mercer International by 340.6% in the 2nd quarter. Jump Financial LLC now owns 276,837 shares of the basic materials company's stock worth $969,000 after buying an additional 214,008 shares in the last quarter. Finally, Gabelli Funds LLC bought a new stake in Mercer International during the second quarter valued at about $1,804,000. Hedge funds and other institutional investors own 85.79% of the company's stock.

Wall Street Analysts Forecast Growth

A number of research firms have recently issued reports on MERC. CIBC dropped their price target on Mercer International from $5.00 to $4.00 and set a "neutral" rating on the stock in a research note on Tuesday, July 22nd. TD Securities reduced their price target on shares of Mercer International from $3.50 to $3.00 and set a "hold" rating for the company in a research report on Tuesday, August 5th. Four equities research analysts have rated the stock with a Hold rating, According to MarketBeat, the company currently has a consensus rating of "Hold" and a consensus price target of $4.25.

About Mercer International

Mercer International Inc, together with its subsidiaries, manufactures and sells northern bleached softwood kraft (NBSK) and northern bleached hardwood kraft (NBHK) pulp worldwide. The company operates through two segments, Pulp and Solid Wood. It manufactures, sells, and distributes pulp, electricity, and chemicals through pulp mills.