Top Three Potential Short-Squeezes

You often hear people talking about short-squeezes they witnessed during the Internet boom and how they either knew someone who got killed or made a killing.

At the time, it was more about momentum than it was about fundamentals or short interest ratios. Who cared about that stuff anyway?, was the thought process in the late 90s. Fast forward to 2007, and you still have short-squeezes, but one must be more careful.

Each month I write a column on the latest potential short-squeezes. At Stockpickr, we identify stocks that exhibit both high short interest and some other bullish quality, such as insider buying or strong earnings. These stocks are compiled in the latest Short Squeeze portfolio.

We always ask, who knows more? The CEO and other insiders, or the random daytraders betting against the company?

There have been major battles in stocks like Dendreon(DNDN Quote) this year, and there are many stocks we have seen recently that could be good candidates for a squeeze. But we will focus on three in this article.

NutriSystem

NutriSystem(NTRI Quote) provides weight management and fitness products and services in the U.S. The company recently announced solid second-quarter earnings but issued earnings expectations for the third quarter below Wall Street's estimates. The company did, however, raise its full-year guidance based on a better-than-expected performance for the first half of 2007.