Top 10 Short-Squeeze Stocks of the Week

One of the best ways to find a short-term trade is to look for a stock that has a high short ratio.

Here's why: The higher the short ratio, the more days it'll take short investors to cover their bearish bets should the stock get a jolt of good news. A heavily shorted stock has the potential to soar on any positive catalyst, because so many investors are placing bets against it.

Stockpickr has reviewed the entire list of New York Stock Exchange stocks and extracted the stocks with the highest short ratios, also called the days-to-cover ratios. These stocks are also screened for price-to-earnings ratios below 25, P/E-to-growth (PEG) ratios, when available, of less than 2, and market caps in excess of $350 million.

At the top of the list is Thomson(TOC Quote - Cramer on TOC - Stock Picks), which has a short ratio of 85. Thomson is an information service provider to the legal, accounting, health care, financial and scientific markets. The company recently reported a 118% year-over-year increase in quarterly earnings on an 11.1% increase in revenue. The stock has a P/E of 19 and a PEG of 1.6, and it pays a yield of 2.4%.

Thomson appears in the Stickerblog.com Book Stocks, a Stockpickr portfolio that also lists book publisher John Wiley & Sons(JW.A Quote - Cramer on JW.A - Stock Picks). Wiley is the publisher of numerous financial and investment books, including the Dummies how-to series. The stock has a P/E of 23 and a short ratio of 2.8. It also has a yield of 1.1%.

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