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Cerner

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Cerner (CERN) is another heavily shorted medical stock worth watching right now. The firm is focused on harnessing the tailwinds from the transition to digital medical records. Cerner's Millennium software platform is marketed to everyone from pharmacists to physicians as a holistic approach to patient management, from medical data to financial records.

A big tailwind for Cerner is the fact that the U.S. government has mandated that medical facilities switch to electronic records -- and it's chipping in billions of dollars of subsidies to make it happen. Cerner's software also helps streamline the administrative side of things for medical providers, in some cases shortening the lag from when services are performed to when practices get paid. That adds some extra incentive for professionals to install Millennium in their offices.

With those big incentives in place, it's no surprise that around 80% of Cerner's sales come from the U.S. But the firm also has some attractive growth opportunities abroad, even if they're a less central part of the firm's long-term strategy. Exceptionally high customer switching costs and a bigger pool of potential clients in the coming years should help keep Cerner's top line on its upward trajectory.

Meanwhile, a short interest ratio of 12.8 makes this stock a solid short squeeze candidate from here.

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