Top Nasdaq Short-Squeeze Plays for April
Updated from 6:59 a.m. EDT
Amid the stock market's continued volatility, stocks on the
Nasdaq
have proven especially volatile, offering the opportunity for potential short-squeeze plays.
A short squeeze takes place when a stock's short-sellers -- those betting a stock will trade lower -- are forced to scramble to cover their bearish positions after the stock starts to rise on a positive catalyst. This short-covering works to drive the price of the stock up even more sharply.
One metric for measuring short-squeeze plays is the short ratio, which represents the number of days it would take a stock's short-sellers to cover their positions, based on the stock's recent average trading volume. The higher the short ratio, the sharper the stock's rise can be.
With recent market volatility in mind, Stockpickr has compiled a list of the
Top Nasdaq Short-Squeeze Plays for April
.
One Nasdaq stock with a very high short ratio is
WebMD Health
(WBMD)
, an Internet-based health information service that sports a short ratio of 15. The company, which is trading near its 52-week low, is scheduled to report first-quarter earnings on May 6. The stock has a price-to-earnings ratio of 24 and a P/E-to-growth ratio of 1.
WebMD is part of the Stockpickr portfolio called
Barron's Insider Purchases March 15
, a list from last month of stocks that reported large stock purchases by company insiders, or executives. Other stocks in the portfolio include
Cabela's
(CAB)
, which has a short ratio of 25.5,
Lions Gate Entertainment
(LGF)
, with a short ratio of 9, and
Enterprise Products Partners
(EPD) - Get Report
, at 2.4.
Another high-short ratio stock that trades on the Nasdaq is
Hain Celestial
(HAIN) - Get Report
. This marketer of natural and organic food products and personal care products has a short ratio of 22. The company just announced that it bought Daily Bread Ltd., a British food producer; and last week JPMorgan downgraded the stock from overweight to underweight, citing potential downside given disappointing sales trends. The stock has a P/E of 22 and a PEG of 1.2.
Hain stock is owned by the
First American Small-Cap Select Fund
, a five-star Morningstar-rated fund managed by Allen Steinkopf. Other stocks held by First American include
Helix Energy Solutions Group
(HLX) - Get Report
, with a 2.1 short ratio,
Emulex
(ELX)
, with a short ratio of 9.1, and
WMS Industries
(WMS) - Get Report
, with a 6.1 short ratio.
United Stationers
(USTR)
is another highly shorted Nasdaq stock, with a short ratio of 16. The business products and supply company is scheduled to discuss first-quarter earnings results in a May 2 conference call. The stock has a P/E ratio of 13 and a PEG ratio of 0.8.
United Stationers is in the portfolio of
, a four-star rated fund managed by Richard Aster. The fund also holds shares of
Cerner
(CERN) - Get Report
, which has an 11.6 short ratio, and
Willis Group
(WSH)
, which has a 1.8 short ratio.
To see the entire list of the current
Top Nasdaq Short-Squeeze Plays
, go to Stockpickr.com.
At the time of publication, Altucher and/or his fund had no positions in stocks mentioned, although positions may change at any time.
James Altucher is president of
LLC, a wholly owned subsidiary of TheStreet.com and part of its network of Web properties, and a managing partner at Formula Capital, an alternative asset management firm that runs a fund of hedge funds. He is also a weekly columnist for the
Financial Times
and the author of
Trade Like a Hedge Fund
,
Trade Like Warren Buffett
and
SuperCa$h
. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback;
to send him an email.
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