This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Top Service Sector Short-Squeeze Plays

Updated from 6:30 a.m. EST

A couple of weeks ago, the drop in the stock market was blamed on the weakness in the services sector. This could create an opportunity for investors looking for short-squeeze plays.

A short squeeze takes place when those selling a stock short scramble to cover their bearish positions on any rise in the stock. This short-covering drives the price of the shares up even more sharply.

Short-squeeze potential is measured by the short-squeeze ratio, which is the number of days it would take for short-sellers to cover their positions. Stockpickr has combed through the publicly traded companies in the services sector and compiled a list of 10 potential short-squeeze plays.

Clear Channel Outdoor Holdings (CCO - Get Report) has one of the highest short ratios of the service sector group: 44. This outdoor advertising company was recently upgraded by Bear Stearns from peer perform to outperform. Its earnings release is scheduled for Feb. 14. The stock has a price-to-earnings (P/E) ratio of 41 and a P/E-to-growth (PEG) ratio of 2.

Clear Channel shares are owned by Enso Capital Management, a global investment manager that invests in equities around the world. Enso also owns Brookdale Senior Living (BKD), which has a short ratio of 12, Ivanhoe Mines (IVN), with a 5 short ratio, and Inverness Medical Innovations (IMA), with a 9.1 short ratio.

Another stock with a high short ratio is School Specialty (SCHS), with a short ratio of 24. Back in December, this educational products company approved a $50 million share-buyback plan. The company has a P/E of 24 and a PEG of 1.

School Specialty is a stock owned by Dell Computer (DELL) founder Michael Dell through his company MSD Capital. Dell also likes IHOP (IHP), which has a short ratio of 5, Time Warner Telecom (TWTC), with a 12 short ratio, and Dollar Thrifty Automotive (DTG), with a 10 short ratio.

Aaron Rents (RNT) is another company with a high short ratio. This company, which rents and leases electronics and furniture, sports a short ratio of 20.5. In January, the company reported an expected 14% rise in fourth-quarter revenue and a 3.9% revenue increase in same-store sales. The stock has a P/E of 12.5 and a PEG of 1.

Aaron is owned by the Stratton Small-Cap Value Fund, a four-star Morningstar-rated fund that specializes in investing in smaller-capitalization companies. It also owns CommScope (CTV), with a 4.6 short ratio, Anixter International (AXE - Get Report), with a 9.3 short ratio, and Terex (TEX - Get Report), with a 1.5 ratio.

To see all 10 stocks, check out the Service Sector Short-Squeeze Stocks at

Please note that due to factors including low market capitalization and/or insufficient public float, we consider Dollar Thrifty Automotive to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.
At the time of publication, Altucher and/or his fund had no positions in stocks mentioned, although positions may change at any time.

James Altucher is president of Stockpickr LLC, a wholly owned subsidiary of and part of its network of Web properties, and a managing partner at Formula Capital, an alternative asset management firm that runs a fund of hedge funds. He is also a weekly columnist for the Financial Times and the author of Trade Like a Hedge Fund , Trade Like Warren Buffett and SuperCa$h . Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback; click here to send him an email. has a revenue-sharing relationship with Trader's Library under which it receives a portion of the revenue from purchases by customers directed there from

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
SCHS $0.09 20.00%
AXE $67.61 0.61%
CCO $5.58 -3.63%
TWTC $42.78 2.42%
TEX $19.89 2.10%


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs