The most recent short interest data was recently released by the NASDAQ for the 12/13/2013 settlement date, and Terreno Realty Corp (TRNO) is one of the most shorted stocks of the Russell 3000, based on 4.67 "days to cover" versus the median component at 4.20. There are a number of ways to look at short data, but one metric that we find particularly useful is the "days to cover" because it considers both the total shares short and the average daily volume of shares typically traded. The number of shares short is then divided by the average daily volume, to express the total number of trading days it would take to close out all of the open short positions if every share traded represented a short position being closed.In the case of Terreno Realty Corp ( TRNO), the total short interest at the 12/13/2013 settlement date was 222,324 shares, which compares to the average daily trading volume of just 47,629 shares, for a "days to cover" ratio of 4.67. When short sellers eventually cover their positions, by definition there must be buying activity because a share that is currently sold short must be purchased to be covered. At the present levels of short interest, if from this point forward every single TRNO share traded represented a short position being closed, then at the average daily volume of 47,629 shares it would only be during the 5th trading day that every short position would be closed.
So it would stand to reason that should some unexpectedly good news come out, and short sellers did not have 5 days of patience but instead wanted to cover their short positions very suddenly, that situation could result in sending the stock higher until the higher price produces enough sellers to generate the necessary volume to close out those positions quickly.Terreno Realty Corp ( TRNO) has something relatively rare for a stock with this much short interest, that being insiders taking the other side of the trade. Looking back over the trailing six month period, TRNO has seen 7 different instances of insider buying, as summarized by the table below:
|07/17/2013||Jaime Jackson Cannon||CFO||1,000||$18.25||$18,250.00|
|07/17/2013||Leroy E. Carlson||Director||5,000||$18.25||$91,250.00|
|07/17/2013||W. Blake Baird||CHAIRMAN AND CEO||21,000||$18.25||$383,250.00|
|07/17/2013||Michael A. Coke||PRESIDENT||3,000||$18.25||$54,750.00|
|07/17/2013||Peter J. Merlone||Director||5,000||$18.25||$91,250.00|
|07/17/2013||Douglas M. Pasquale||Director||5,350||$18.25||$97,637.50|
|08/19/2013||Douglas M. Pasquale||Director||4,000||$17.50||$70,000.00|
|08/21/2013||Douglas M. Pasquale||Director||1,000||$17.10||$17,100.00|
|11/11/2013||Peter J. Merlone||Director||4,781||$17.15||$81,994.15|
|11/13/2013||Peter J. Merlone||Director||11,599||$17.12||$198,631.17|
|11/18/2013||Douglas M. Pasquale||Director||4,559||$17.21||$78,474.49|
|11/19/2013||Douglas M. Pasquale||Director||2,441||$16.96||$41,405.51|
|11/20/2013||Douglas M. Pasquale||Director||1,000||$16.76||$16,760.00|
And looking at the chart below, TRNO's low point in its 52 week range is $14.99 per share, with $20.27 as the 52 week high point — that compares with a last trade of $17.78. In recent trading, shares of Terreno Realty Corp ( TRNO) were changing hands at $17.78/share.