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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Hated Stocks Primed for a Short Squeeze

Stocks in this article: CRM DLR FAST GMCR MTB

Digital Realty Trust

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Last up is real estate investment trust Digital Realty Trust ( DLR). With a short interest ratio of 15.7, it would take more than three weeks of buying pressure for short sellers to cover their bets against the firm. That makes DLR the most heavily-shorted name on our list today.

Digital Realty Trust is a REIT with a technology niche. It owns datacenters, Internet gateways and manufacturing facilities, nearly 100 properties comprising 16.8 square feet of leasable space in all. Because demand for datacenter capacity continues to grow (as technology like cloud computing becomes more and more popular), DLR has an added demand factor that most other landlord REITs simply don't. But don't think of this stock like a play on real estate. At its core, it's an income-generation tool.

DLR enters into long-term triple-net leases with tenants, an arrangement that takes most of the risks off of DLR's balance sheet and puts the onus on tenants instead. The result is a predictable income stream and a hefty 4.78% dividend yield right now. And because dividends are like kryptonite for short sellers, shorts need a higher level of conviction to hang onto a name that's paying out gobs of cash. That gives DLR significant squeeze potential this quarter.

To see these short squeezes in action, check out this week's Short Squeezes portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

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Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

Follow Jonas on Twitter @JonasElmerraji

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