Top Financial Short-Squeeze Plays
With the financial sector dominating the business news headlines, and financial stocks such as Goldman Sachs (GS) and JPMorgan (JPM) helping to lead some moves higher, now may be the time to look at heavily shorted names in the sector in anticipation of a snapback, when short-sellers scramble to cover their positions.
This is especially true with companies such as Lehman Brothers (LEH) and UBS (UBS), who are fighting the short-sellers by issuing stock to increase their liquidity. The key ratio for analyzing short-squeezes is the short ratio, which represents the number of days it would take for those shorting a stock to cover their bearish positions should the stock start moving higher, based on the stock's recent average daily trading volume.
With this in mind, Stockpickr has compiled a list of the Top Financial Short-Squeeze Plays.
One of the stocks with a high short ratio is Woori Finance Holdings (WF), a South Korean-based financial services and banking company with a short ratio of 45.5. The stock rose 9% April 1, following Lehman Brothers' liquidity news. Woori has a forward price-to-earnings ratio of 6.6 and a P/E-to-growth ratio of 0.6.Woori appears in a Stockpickr portfolio called South Korean Stocks You Can Invest In From US. Other stocks in the portfolio include Kookmin Bank (KB), which has a 1.4 short ratio, Shinhan Financial Group (SHG), with a 0.9 short ratio, and SK Telecom (SKM), with a short ratio of 2. Another stock with a high short ratio is Greenhill & Co (GHL), a New York investment banking firm with a short ratio of 34.2. The company recently appointed its managing director Richard Lieb to the chief financial officer position. The stock has a forward P/E ratio of 14.6, a PEG of 1 and a yield of 2.5%. Greenhill is a stock owned by Al Gore's investment vehicle, Generation Investment Management. Gore also owns shares of Johnson Controls (JCI), with a short ratio of 4, Aflac (AFL), with a 2.1 short ratio, and Becton, Dickinson (BDX), which has a short ratio of 0.9. Enstar Group (ESGR) is another financial stock with a high short ratio; the manager of insurance companies has a short ratio of 24.1. The company recently closed its acquisition of AMP Limited's Australian-based reinsurance and insurance operations. The stock has a trailing P/E ratio of 22. Enstar is a favorite of top stock value investor and hedge fund manager Michael Price. He also holds Tyco Electronics (TEL), which has a 1.9 short ratio, CBS (CBS), with a 5.5 short ratio, and Northwestern (NWEC), with an 11.6 short ratio. For for other heavily shorted stocks in the sector, check out the Top Financial 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