Top Potential Short-Squeeze Amex Stocks

One of the best times to start looking at potential short-squeeze stocks is after the stock market has taken a big dive, similar to what we have experienced over the last week or so.

A short-squeeze stock is a stock that has been heavily shorted and is purchased with the anticipation of the stock moving up sharply on good news due to the short-sellers covering their positions. The short ratio reflects the number of days it would take the short-sellers to cover their positions, based on the recent average daily volume of the stock.

The American Stock Exchange just announced a 4.2% increase in short interest on stocks traded on this exchange. Stockpickr has gone through the list of the AMEX stocks with the highest short ratios. Each of these stocks has favorable price-to-earnings (P/E) ratios and market caps over $500 million.

One of the stocks with the highest short ratios is National Healthcare(NHC Quote), with a ratio of 34. This company, which operates long-term health care, assisted living and independent living centers just completed its merger with National Health Realty. The stock has a P/E of 16 and a yield of 1.7%.

National Healthcare also appears on the Long-Term Care Stocks portfolio at Stockpickr. Other long-term health care stocks in the portfolio include Sun Healthcare Group(SUNH Quote), with a short ratio of 10, Kindred Healthcare(KND Quote), which has a short ratio of 16, and Skilled Healthcare Group(SKH Quote), with an 11 short ratio.