Stockpickr: Three Short-Squeeze Plays
Each month I write a column on the latest potential short squeezes. At Stockpickr, we identify stocks that exhibit both high short interest and a high rate of insider-buying. These stocks are compiled in the Short Squeeze portfolio.
Put simply, a stock with high short interest has a lot of people betting the stock price will go down. If the stock starts to move up, then all of those people who are short the stock have to buy shares to cover their losses. This creates a squeeze.
The stocks on the list we compile, however, also show extensive insider-buying. In other words, the CEO or other people intimately familiar with the company are buying the stock.
So I ask, who knows more? The CEO and other insiders, or the random daytraders betting against the company?Last month's short-squeeze column featured Waste Services (WSII) and The Greenbrier Cos. (GBX). In the last month of trading, Waste Services has since climbed from $9.99 to $10.97, and Greenbrier shares have gone from $27.25 to $31.32. Jim Cramer also looked at Stockpickr's Short Squeeze portfolio and featured Greenbrier on his Mad Money TV show. This month I'm intrigued by Gaiam (GAIA), another stock that's on the list. Gaiam is the leader in fitness, yoga and other personal improvement videos. For example, if you check into any hotel owned by LodgeNet Entertainment and watch a fitness video on the in-hotel network, it's a Gaiam video.
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