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5 Big Short-Squeeze Stocks Ready to Pop

Stocks in this article: CMGCRMICELULUBSAC

Salesforce.com

Investors in Salesforce.com ( CRM) got their first taste of a squeeze last Friday, as shares of the $30 billion software maker got boosted by 12.5% on the heels of positive earnings news. Friday's bump added some much-needed relative strength to CRM's year-to-date performance, pushing shares' 2013 gains to a market-beating 18%.

But shorts are still squarely betting against Salesforce.com right now. With a short interest ratio of 16, it would take more than three weeks of buying pressure for short sellers to cover their positions.

>>4 Big Tech Stocks on Traders' Radars

Salesforce.com makes business software that customers use to interact with their customer databases. That makes CRM's offerings a must-have application for its 100,000 customers. The firm's web application lets users handle everything from sending newsletters to tracking sales. And since the Salesforce.com platform has a direct, measureable correlation to sales, it's easy for customers to justify paying the bill.

Salesforce was one of the first big software companies to make the move to the "cloud." By offering software hosted online, the firm avoids piracy concerns while at the same time adding new user benefits and converting its business to an attractive subscription-based model. Customers tend to be stickier because they've invested in the firm's platform; because integration takes place deep in the product, switching costs are extremely high for customers considering jumping to a competitor's product.

With a defensible moat and positive earnings momentum this quarter, this stock looks like a prime short squeeze candidate.

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