BALTIMORE ( Stockpickr) -- All hail the mighty consumer!
In one way or another, consumer spending accounts for 70 cents of every dollar of GDP in this country, contributing a massive chunk of America's economic engine. So it should come as no surprise that consumer spending can have an even bigger impact on individual consumer-driven stocks.
It also shouldn't be a big surprise that those stocks have big targets on their backs. Consumer spending is one of the economic data points that has the biggest potential for volatility -- consumers can be a fickle group when it comes to parting with cash, after all.
But that's exactly why investors searching for short squeeze opportunities should be looking at consumer names in May.>>7 Stocks Soaring in a Weak Market In case you're not familiar with the term, 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. Naturally, these plays aren't without their blemishes -- there's a reason that these stocks are being heavily shorted. But for investors looking for exposure to a speculative play with a beefier risk/reward tradeoff, these could be powerful upside plays for the coming year. And because equities haven't yet reacted to the 4% increase in consumer personal spending in 2012, the potential for a snap higher is even bigger than before. Without further ado, here's a look at our list of consumer-driven short squeeze opportunities.
Select the service that is right for you!COMPARE ALL SERVICES
- $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
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV