Vertex Energy Sees 20.6% Short Interest Spike and $150M Buyback Plan
Short interest in Vertex, Inc. surged 20.6% to 7,266,393 shares as of December 31, representing 8.0% of its float and a 7.1-day cover ratio. On November 3, the board authorized a $150 million repurchase plan to buy up to 4.1% of outstanding shares.
1. Surge in Short Interest
Short interest in Vertex, Inc. (NASDAQ: VERX) rose sharply during December, with the total number of shares sold short climbing 20.6% to 7,266,393 by month-end, up from 6,023,811 on December 15. With an average daily trading volume of 1,022,407 shares, this translates into a days-to-cover ratio of 7.1, indicating that over a week of typical trading would be needed to cover existing short positions. Approximately 8.0% of the company’s float is currently held by short sellers, reflecting heightened bearish sentiment among certain market participants.
2. Institutional Investor Movements
Several institutional investors adjusted their stakes in Vertex during the past two quarters. Fifth Third Bancorp increased its holding by 31.0%, adding 347 shares to reach 1,467 shares. Raymond James Financial established a new position valued at approximately $54,000. Blue Trust Inc. expanded its stake by 44.4%, acquiring an additional 512 shares for a total of 1,664 shares. Advisors Asset Management boosted its ownership by 25.7% to 1,933 shares following a 395-share purchase. Johnson Financial Group also initiated a position in the third quarter worth about $130,000. Collectively, hedge funds and institutions now account for 70.32% of outstanding shares.
3. Quarterly Earnings and Profitability Metrics
In the most recent quarter, Vertex delivered revenue of $192.11 million, representing a 12.7% year-over-year increase and narrowly exceeding the consensus estimate of $191.62 million. The company reported adjusted earnings of $0.17 per share, surpassing projections by $0.01. Despite a negative net margin of 7.32%, Vertex achieved a return on equity of 26.84%, underscoring efficient capital deployment. Analysts currently forecast full-year earnings of $0.38 per share, reflecting continued growth expectations in the company’s specialty refining and re-refining businesses.
4. Share Repurchase Plan Approval
On November 3, the board of Vertex approved a new share repurchase program authorizing up to $150 million for open-market buybacks, representing approximately 4.1% of shares outstanding. The authorization signals management’s confidence in the company’s valuation and cash flow generation. Buybacks provide flexibility to return capital to shareholders and may offset dilution from equity-based compensation and future acquisitions.