These Manufacturing Stocks Could Be Short Squeezes
Updated from 6:56 a.m. EST
A couple of weeks ago, the drop in the stock market was blamed on the service sector stocks. Then last week, when the market fell, the manufacturing stocks were blamed.
Stockpickr has pored over the disliked sector and compiled Manufacturing Sector Short-Squeeze Plays, a list of industrial goods stocks with short ratios greater than 10, and therefore the highest potential for a short squeeze.
A short squeeze takes place when a stock's short-sellers scramble to cover their bearish positions after the stock starts to move higher on positive news. This buying, or short-covering, causes the share price to spike even higher.One manufacturing stock with a very high short ratio is Simpson Manufacturing (SSD), at 29.4. The building products manufacturer last week declared a cash dividend of 10 cents a share for the quarter, giving the stock a yield of 1.7%. It has a trailing price-to-earnings (P/E) ratio of 18.5 and a P/E-to-growth (PEG) ratio of 1.2. Simpson shares are owned by Pennsylvania Mutual Fund, which has generated a five-year average annual return of 16.6%. Other stocks that the fund holds include Woodward Governor (WGOV), with a short ratio of 9.4; Lincoln Electric Holdings (LECO), with a 4.2 short ratio; and Oil States International (OIS), with a short ratio of 4.1. Another heavily shorted manufacturer is Heico (HEI), which has a short ratio of 14.5. The Florida-based manufacturer of aerospace, defense and electronic products has scheduled its regular quarterly conference call for Feb. 28. Heico has a P/E of 32, a PEG of 1.3 and pays a small dividend of 0.2%. Heico appears in the Top 10 NYSE Short-Squeeze Stocks, a related Stockpickr portfolio from November that lists the stocks on the New York Stock Exchange with the highest short ratios. Other stocks in the portfolio include Piedmont Natural Gas (PNY), now with a short ratio of 18.5; Primedia (PRM), with a short ratio of 30; and Sealy (ZZ), a company that has a 16.6 short ratio as well as a great stock symbol. Franklin Electric (FELE) also has a high short ratio, at 18.6. Shares of this Indiana-based manufacturer of groundwater systems, fuel pumps, submersible pumps and motors trade around their 52-week low. The stock has a P/E of 20, a PEG of 1.5, and it pays a yield of 1.5%. Franklin is part of the exchange-traded fund PowerShares Water Resources. Other stocks in this ETF include Aecom Technology (ACM), which has a short ratio of 5.2; ITT Corp. (ITT), with a 2.8 short ratio; and URS Corp. (URS), with a 1.8 short ratio. For more industrial goods stocks with short ratios above 10, check out the Manufacturing Sector Short-Squeeze Plays at Stockpickr.com.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV