BALTIMORE (Stockpickr) -- It's no secret that the fundamental attributes all investors hope for at earnings season are the bane of the short-sellers. After all, short-sellers are hoping for an event that will trigger share prices to fall. But what happens when the shorts stack up against a highly profitable business? In some cases, it's the perfect storm for a sort squeeze -- and a potentially lucrative time for long-side investors who hold on for the ride.
A short squeeze 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 estimates 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, we create 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.
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