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Top Nasdaq Short-Squeeze Plays for April

James Altucher

Amid the stock market's continued volatility, stocks on the Nasdaq have proven especially volatile, offering the opportunity for potential short-squeeze plays.

A short squeeze takes place when a stock's short-sellers -- those betting a stock will trade lower -- are forced to scramble to cover their bearish positions after the stock starts to rise on a positive catalyst. This short-covering works to drive the price of the stock up even more sharply.

One metric for measuring short-squeeze plays is the short ratio, which represents the number of days it would take a stock's short-sellers to cover their positions, based on the stock's recent average trading volume. The higher the short ratio, the sharper the stock's rise can be.

With recent market volatility in mind, Stockpickr has compiled a list of the Top Nasdaq Short-Squeeze Plays for April.

One Nasdaq stock with a very high short ratio is WebMD Health (WBMD Quote - Cramer on WBMD - Stock Picks), an Internet-based health information service that sports a short ratio of 15. The company, which is trading near its 52-week low, is scheduled to report first-quarter earnings on May 6. The stock has a price-to-earnings ratio of 24 and a P/E-to-growth ratio of 1.

WebMD is part of the Stockpickr portfolio called Barron's Insider Purchases March 15, a list from last month of stocks that reported large stock purchases by company insiders, or executives. Other stocks in the portfolio include Cabela's (CAB Quote - Cramer on CAB - Stock Picks), which has a short ratio of 25.5, Lions Gate Entertainment (LGF Quote - Cramer on LGF - Stock Picks), with a short ratio of 9, and Enterprise Products Partners (EPD Quote - Cramer on EPD - Stock Picks), at 2.4.

Another high-short ratio stock that trades on the Nasdaq is Hain Celestial (HAIN Quote - Cramer on HAIN - Stock Picks). This marketer of natural and organic food products and personal care products has a short ratio of 22. The company just announced that it bought Daily Bread Ltd., a British food producer; and last week JPMorgan downgraded the stock from overweight to underweight, citing potential downside given disappointing sales trends. The stock has a P/E of 22 and a PEG of 1.2.

Hain stock is owned by the First American Small-Cap Select Fund, a five-star Morningstar-rated fund managed by Allen Steinkopf. Other stocks held by First American include Helix Energy Solutions Group (HLX Quote - Cramer on HLX - Stock Picks), with a 2.1 short ratio, Emulex (ELX Quote - Cramer on ELX - Stock Picks), with a short ratio of 9.1, and WMS Industries (WMS Quote - Cramer on WMS - Stock Picks), with a 6.1 short ratio.

United Stationers (USTR Quote - Cramer on USTR - Stock Picks) is another highly shorted Nasdaq stock, with a short ratio of 16. The business products and supply company is scheduled to discuss first-quarter earnings results in a May 2 conference call. The stock has a P/E ratio of 13 and a PEG ratio of 0.8.

United Stationers is in the portfolio of Meridian Growth Fund, a four-star rated fund managed by Richard Aster. The fund also holds shares of Cerner (CERN Quote - Cramer on CERN - Stock Picks), which has an 11.6 short ratio, and Willis Group (WSH Quote - Cramer on WSH - Stock Picks), which has a 1.8 short ratio.

To see the entire list of the current Top Nasdaq Short-Squeeze Plays, go to Stockpickr.com.