BALTIMORE ( Stockpickr) -- Sometimes it pays to be contrarian. Contrarian investors bet against the herd, the justification being that by the time an investment idea becomes conventional wisdom, it's probably already run its course. That's why while most people were investing in tech stocks in 1999 and real estate companies in 2006 and 2007, contrarian investors were betting in the other direction.
One of the best ways to make a contrarian bet is by gunning for a short squeeze, which is the buying frenzy that ensues when a heavily shorted stock starts to look attractive again to investors, causing share price to skyrocket.
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.
Each week, Stockpickr creates a portfolio of stocks with high short interest ratios and the catalysts to trigger a squeeze. Here's a look at this week's potential plays, which focus on mid-cap stocks.
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