Squeezing the Shorts: Earnings Growth Plays

BALTIMORE (TheStreet) -- There are plenty of reasons for stocks to have the attention of short-sellers.

Waning financials, a deteriorating business model and expected upcoming bad news are all par for the course. But what about when a stock's underlying business and fundamentals are good, but the short-sellers are still betting against it? Then it's gearing up to be a potential short-squeeze play.

A short squeeze is the buying frenzy that ensues when a heavily shorted stock starts to look attractive again to investors. As more and more of the short investors buy shares to cover their positions, share prices skyrocket. Almost anything can trigger a short squeeze, including trumping earnings expectations, winning a lawsuit, unveiling a new product and even announcing a management change.

One of the best indicators of just how high a short-squeezed stock could go is the short-interest ratio, which divides shares short by average daily trading volume in order to get a ballpark estimate of the number of days it would take for short-sellers to cover their positions. The higher the short ratio, the higher the potential profits when the shorts get squeezed.

With this in mind, Stockpickr has created a portfolio of stocks this week with high short interest ratios and the catalysts to trigger a squeeze. Here's a look at this week's potential plays.