Top Consumer Goods Short-Squeeze Plays

Updated from 7:01 a.m. EDT

The New York Stock Exchange just reported a high level of short interest, and the sector with the highest short ratios is the consumer goods group.

Short interest is measured by the short ratio, which is the number of days, based on the stock's recent trading volume, that it would take the short-sellers to cover their bearish bets on any stock price move higher. These heavily shorted stocks can move sharply upward on any positive news as short-sellers quickly try to cover their positions.

Stockpickr has sorted through the stocks in the sector and compiled a list of the top Consumer Goods Short-Squeeze-Candidates.

One of the Dow stocks with the highest short ratios -- 28.2 -- is Vector Group (VGR Quote - Cramer on VGR - Stock Picks), a cigarette company that sells under the Liggett Select, Grand Prix, Eve, Pyramid and USA brands. The company a few weeks ago reported a rise in fourth-quarter revenue but a drop in net income over last year. The stock has a trailing price-to-earnings (P/E) ratio of 15.8, a P/E-to-growth (PEG) ratio of 1.6 and a yield of 8.8%.

Vector shares are owned by the DWS Dreman Small-Cap Value Institutional Fund, a five-star Morningstar-rated fund managed by David Dreman. DWS also owns shares of RTI International Metals (RTI Quote - Cramer on RTI - Stock Picks), which has a short ratio of 7.2, Anixter International (AXE Quote - Cramer on AXE - Stock Picks), which has a short ratio of 9.4, and Atwood Oceanics (ATW Quote - Cramer on ATW - Stock Picks), which has a short ratio of 4.

Polaris Industries (PII Quote - Cramer on PII - Stock Picks) is another company with a high short interest. This manufacturer of ATVs, snowmobiles and motorcycles has a short ratio of 35. The company recently increased its first-quarter guidance, expecting a profit of 44 cents to 49 cents a share, an increase of 5 cents a share from its previous guidance. The stock has a forward P/E of 10.6, a PEG of 0.9 and a yield of 3.8%.

Polaris shows up on the Stockpickr portfolio called Top Dividend Increasers for the Week Ending Jan. 26, due to its boost in its dividend payout rate. Other companies in this portfolio include Donaldson (DCI Quote - Cramer on DCI - Stock Picks), which has a short ratio of 7, Canadian National Railway (CNI Quote - Cramer on CNI - Stock Picks), with a 2.7 short ratio, and Energen (EGN Quote - Cramer on EGN - Stock Picks), with a short ratio of 1.

Flowers Foods (FLO Quote - Cramer on FLO - Stock Picks) is a bakery products company that has a short ratio of 15.9. The stock has a forward P/E of 19, a PEG of 2.1 and a yield of 2.1%.

Flowers is in the portfolio of John Keeley, who runs Keeley Asset Management. Keeley also holds shares of Terex (TEX Quote - Cramer on TEX - Stock Picks), which has a 1.4 short ratio, McDermott International (MDR Quote - Cramer on MDR - Stock Picks), also with a 1.4 ratio, and Commercial Metals Co (CMC Quote - Cramer on CMC - Stock Picks), with a 2.8 ratio.

For a list of more potential short-squeeze plays, check out the Consumer Goods Short-Squeeze Candidates portfolio at Stockpickr.com.