One of the standouts of today's morning trading session has been Fluence Energy, which logged a -1.6% drop and underperformed the S&P 500 by -2.0%. The Renewable Utilities stock is now trading at $25.56 per share and is -12.32% below its average target price of $29.15. Analysts have set target prices ranging from $18.0 to 38.0 dollars per share, and have given the stock an average rating of buy.
The market, on the other hand, is a bit more pessimistic. Fluence Energy's short interest -- meaning the percentage of its share float that is being shorted on an expectation of a price decline -- is quite high at 20.2%. The float includes only shares that are available for public trading, and excludes preferred shares.
Short selling involves borrowing shares and then selling them at current market prices. In the successful version of the strategy, the shares are purchased at a lower price at some time in the future. The investor then returns the shares to the lender, and keeps the profit made on the sell/buy transaction.
Another way to gauge the sentiment on Fluence Energy is to look at the percentage of institutions that are invested in the stock. In this case, 65.2% of the shares are held by pension, mutual, and hedge funds, which shows that these institutions probably have strong confidence in the stock.
If institutions are invested in a particular stock, it shows in most cases that they have performed quality research and concluded that it is a good investment. In some cases, however, increases in institutional ownership could be a sign of a takeover attempt or proxy fight, which can actually injure share prices. Also, institutions are not infallible, and can certainly make miscalculations -- often with spectacular results.
Overall, there is mixed market sentiment towards Fluence Energy because of an analyst consensus of some upside potential, a buy rating, an unusually large proportion of its shares sold short, and an average number of institutional investors. Investors should not base their decisions on market sentiment only, they should also be aware of a stock's fundamentals before committing.
At a glance, here are some essential statistics you may want to know about FLNC:
It has trailing 12 month earnings per share (EPS) of $-1.01 per share
Fluence Energy has a trailing 12 month Price to Earnings (P/E) ratio of -25.3 while the S&P 500 average is 15.97
The company has a Price to Book (P/B) ratio of 7.38 in contrast to the S&P 500's average ratio of 2.95
Fluence Energy is a Utilities company, and the sector average P/E and P/B ratios are 22.89 and 1.03 respectively