Top 10 Short-Squeeze Stock Plays Under $10

When a company announces or is the subject of good news, its stock generally shoots higher. And generally, the lower-priced shares move upward much further on a percentage basis than higher-priced stocks.

Stockpickr has taken a look at stocks selling below $10 a share and pulled out the Top 10 Short Squeeze Stocks Below $10.

Besides trading for less than $10 each, these stocks have a few other things in common. They have short ratios greater than 10, a price/earnings-to-growth (PEG) ratio less than 2.75 and market caps greater than $300 million.

Remember, the short ratio, also known as the days-to-cover ratio, is the number of days it would take a stock's short-sellers to cover their positions based on recent daily trading volume. When the good news comes out, the short-sellers scramble to cover their bearish bets.

One of the stocks on the list is Cincinnati Bell(CBB Quote), a telecommunications company that dates back to 1873 and serves the Cincinnati and Dayton, Ohio, markets. It has a market cap of more than $1 billion, and it sells for about $5 a share.

The stock has a short ratio of 14, which means it would take the short-sellers almost 14 days to cover their positions. The stock has a P/E ratio of 14 and a PEG ratio of 1.8.

Cincinnati Bell is part of the Low-Price Value Line System portfolio, which includes stocks in the Value Line group that are trading below $10. Other stocks in the Value Line list include Quest Communications(Q Quote), which has a short ratio of 3.9, and 1-800-Flowers.com(FLWS Quote), which has a short ratio of 8.9.