This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

6 Heavily Shorted Stocks That Could Explode

Stocks in this article: TZOO SIRI AVNR NEP RBCN CREE VECO

WINDERMERE, Fla. ( Stockpickr) -- If you want to see how powerful a short-squeeze can be, then take a look at the chart for Travelzoo (TZOO) over the last two months. Shares of the global Internet media player soared from a low of $36.16 a share to a recent high of $103.80 before settling back down to current levels of around $85. This is one heck of a move in a very short timeframe, and it probably would have never happened had the stock not been so heavily shorted.

As of March 31, the current short interest as a percentage of the float for Travelzoo is 35.2%. That's a huge short interest for a stock that only has 5.5 million shares in its tradable float. This ridiculously small float is another major reason that Travelzoo skyrocketed. Once the momentum buyers stepped in, it became very easy to squeeze the shorts. They simply overwhelmed the bears with continuous buy orders that increased in volume as the stock rose.

One thing about a short squeeze that you don't hear about often is that if there aren't fundamentals to support the move, the stock will eventually round-trip and give back all the gains. Understanding this will help you in deciding if you should hold a heavily shorted stock for longer than just a trade.

Related: Must-See Charts: 5 Blue-Chip Trades

I am not sure which one Travelzoo is just yet, because we have seen this stock round-trip many times in the past. But Travelzoo did report revenue of $37 million on 37 cents a share in profits during the most recent quarter, which was a jump of 30% from a year ago.

I will save the debate on Travelzoo for another time. I do think it's always prudent take some profits in a stock that has run up that much in just two months. What I would rather do now is look for the next Travelzoo that could produce huge profits off the demise of aggressive bears caught short the wrong stock.

With this in mind, let's take a look at a number of heavily shorted stocks that could easily see a massive short squeeze like Travelzoo's.

1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,879.77 +74.97 0.42%
S&P 500 2,070.13 -0.52 -0.03%
NASDAQ 4,763.8540 -1.5260 -0.03%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs