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Top Potential Short-Squeeze Amex Stocks

James Altucher

A short-squeeze stock is a stock that has been heavily shorted and is purchased with the anticipation of the stock moving up sharply on good news due to the short-sellers covering their positions. The short ratio reflects the number of days it would take the short-sellers to cover their positions, based on the recent average daily volume of the stock.

The American Stock Exchange just announced a 4.2% increase in short interest on stocks traded on this exchange. Stockpickr has gone through the list of the AMEX stocks with the highest short ratios. Each of these stocks has favorable price-to-earnings (P/E) ratios and market caps over $500 million.

One of the stocks with the highest short ratios is National Healthcare(NHC Quote), with a ratio of 34. This company, which operates long-term health care, assisted living and independent living centers just completed its merger with National Health Realty. The stock has a P/E of 16 and a yield of 1.7%.

National Healthcare also appears on the Long-Term Care Stocks portfolio at Stockpickr. Other long-term health care stocks in the portfolio include Sun Healthcare Group(SUNH Quote), with a short ratio of 10, Kindred Healthcare(KND Quote), which has a short ratio of 16, and Skilled Healthcare Group(SKH Quote), with an 11 short ratio.

Another Amex stock with a high short ratio is Franklin Street Properties(FSP Quote), with a short ratio of 30. This real estate investment trust just released third-quarter earnings that showed a sharp drop in net earnings per share. The stock has a P/E of 11 and pays a yield of 8%.

Franklin Street shows up in the Barron's Insider Purchases 8-11-07 portfolio at Stockpickr, due to the fact that an officer and a director recently purchased $1.5 million worth of the stock. Other stocks in that Barron's Insider portfolio include Energy Transfer Equity(ETE Quote), with a short ratio of 4, and Thornburg Mortgage(TMA Quote), at 7.

Bio-Rad Laboratories(BIO Quote) is another fairly high short-ratio stock on the American Stock Exchange, with a 10 days-to-cover ratio. This producer of specialty chemicals for the biochemical and pharmaceutical industries just announced a solid increase in quarterly sales and net earnings per share. The stock has a P/E of 28 and a P/E-to-growth ratio of 2.

The University of Chicago Endowment has Bio-Rad in its portfolio. The $5 billion endowment is the 13th largest in the U.S. The endowment also owns DeVry(DV Quote), with a short ratio of 8, and KB Home(KBH Quote), at 4.

To see the rest of the top stocks on the American Stock Exchange with the highest short ratios, including two stocks that sell for over $400 apiece, check out the Top AMEX Short-Squeeze Stocks at Stockpickr.com