Hawaiian Electric Industries heads into its May 8 earnings report with short sellers rebuilding positions fast — while options traders have swung sharply in the opposite direction.
The most striking development this week is the pace of short-side accumulation. Short interest jumped 20% over the past week to 11.5% of the free float — one of the sharpest weekly builds in recent months. The move reverses a gradual decline through most of April. From a low near 16.2 million shares on April 17, estimated short positions climbed to almost 19.9 million by April 28. The ORTEX short score has risen steadily alongside, climbing from 57.3 to 63.6 over the past two weeks. That sits in the 5th percentile of the universe — meaning the data flags HE as among the more heavily shorted stocks in the broader market. Days-to-cover from the latest FINRA settlement stands at 12.3, a high number that underscores how difficult unwinding would be if sentiment shifted.
Yet the lending market isn't screaming squeeze. Availability is still reasonably ample — with availability running well above the tight threshold — and cost to borrow has actually drifted lower, easing about 6% on the week to roughly 0.45%. That borrow rate is near the cheapest level of the past six weeks. The 52-week peak on lending utilization came in at 21.9%, and the current reading of 17% is meaningfully below that. In short: the demand for borrows has picked up sharply, but the supply side has not tightened in response. Shorts are rebuilding, but this is not a borrow squeeze setup.
Options tell a very different story from short sellers. The put/call ratio collapsed to 0.52 on April 29 — against a 20-day mean of 0.84 — placing the reading more than four standard deviations below its recent average. That is the most bullish options positioning the stock has seen in at least a year (the 52-week low on PCR is 0.24). Call volume is running well ahead of puts. Whether this reflects genuine optimism about the May 8 print, or hedgers rolling off downside protection ahead of the settlement news, the options market and the short market are pointing in opposite directions right now.
The Maui wildfire litigation is the backdrop to all of this. Reports this week confirmed that the $4 billion settlement fund is close to distributing payouts to survivors, with coverage noting that few will fully break even. That process moving closer to completion removes a layer of uncertainty around HE's balance sheet liability — which may explain the sudden call activity. On the institutional side, both Vanguard and Horizon Kinetics added meaningfully to their positions in Q1, each building by more than a million shares. Horizon Kinetics now holds roughly 11.2% of shares. That kind of concentrated active-manager conviction sits awkwardly against the short-seller rebuild of the past week.
Analyst coverage has been quiet since early March — the most recent action was Barclays raising its target to $14 from $13 on March 2, keeping an Equal-Weight rating. The mean price target is $13.75, modestly below the current price of $14.93. Jefferies moved to an Underperform rating in January with a $12.50 target. The Street is broadly neutral to cautious: no upgrades, no bullish thesis from a bellwether firm. The PE sits at 13.7x and EV/EBITDA at 8.2x, both edging lower over the past 30 days. EPS momentum over 90 days ranks in the 84th percentile — among the better-performing names on forward estimate revisions — though the 30-day read has faded to the 20th percentile.
The May 8 earnings release is the clearest near-term catalyst. Last quarter's print produced a modest 3% one-day gain before fading to a 5-day loss. The setup into this quarter is unusual: shorts rebuilding into a week where options traders are actively buying calls, with settlement news flowing and institutional holders still adding. What the May 8 numbers do to that tension — particularly any update on the wildfire liability resolution and rate case progress — is the single most important thing to watch.
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