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TheStreet Open House

5 Short-Squeeze Stocks Ready to Pop

Discovery Communications

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If the market's had a great year in 2013, Discovery Communications ( DISCA) has managed to do one better. Shares of the $30 billion TV broadcaster have rallied almost 32% year-to-date, stomping the performance of the S&P 500 by a wide margin.

Still, investors hate this stock right now. With a short interest ratio of 10.7, it would take short sellers more than two weeks of buying at current volume levels to cover their positions.

>>5 Earnings Stocks Everyone Hates -- but You Should Love

Discovery owns a handful of international cable TV channels, including the namesake Discovery Channel, TLC, Science Channel and Animal Planet, and positions in properties such as Oprah Winfrey's OWN Network, launched in 2011. Discovery's niche positioning gives it some big benefits -- the firm's channels focus on topics such as science, technology and history, and they're able to sell more targeted advertising as a result. That's helped push the firm's net margins far above those of more conventional network broadcasters.

Discovery's channels are only part of the story. Content is king in the broadcast business, and so Discovery's 100,000 hour video library provides the firm with an extremely valuable asset -- especially now that streaming video firms such as Amazon.com ( AMZN) and Netflix ( NFLX) are falling all over themselves to license content.

DISCA has some tailwinds at its back right now, and its hefty short interest gives it the potential to pop this summer.

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