The Nasdaq Short-Squeeze Plays

These heavily shorted Nasdaq-traded stocks have the potential to surge higher on any positive catalyst.
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For the last few months, the stocks with the highest short interest have tended to be the financial stocks. Now other industries are showing up at the top of the list, including food and manufacturing.

One way that an investor can make a quick investment gain is through a short-squeeze play. A short squeeze takes place when a stock's price rises on good news and the stock's short-sellers scramble to cover their bearish positions. This short-covering, in turn, can drive the price of the stock even higher.

The ratio for measuring a short-squeeze play 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 trading volume.

Stockpickr has compiled the

Top Nasdaq Short-Squeeze Plays

portfolio, a list of heavily shorted stocks that trade on the


and have the greatest potential to rise based on their short ratios.

One Nasdaq stock with a high short interest is

SY Bancorp

(SYBT) - Get Report

, which has a short ratio of 67.1. This Kentucky-based holding company for Stock Yards Bank & Trust reported that its first-quarter net profit dropped by 12% but its loans grew by 9% year over year. The stock has a P/E of 15 and a PEG of 1.63, and it pays a yield of 2.9%, after recently declaring a 17-cent dividend.

SY Bancorp shows up in a Stockpickr portfolio called

Dividend-Raisers for the Week Ending 2-23-08

. Other stocks in the portfolio include

CNH Global


, which has a short ratio of 4.7;

Leggett & Platt

(LEG) - Get Report

, with a 9.9 short ratio; and


(PPL) - Get Report

, with a 2.8 ratio.

Another Nasdaq stock with a high short interest is

Franklin Electric

(FELE) - Get Report

, a manufacturer of groundwater and fuel pumping systems. The stock has a short ratio of 44.8. In April, the company reported record revenue and operating income for the first quarter. The stock has a PE of 31 and a PEG of 1.25, and it pays a yield of 1.2%.

Franklin is part of the

PowerShares Water Resources

, which tracks the Palisades Water index. It has returned 17.68% over the last year. It also owns

Tetra Tech

(TTEK) - Get Report

, with a short ratio of 15.6;

Valmont Industries

(VMI) - Get Report

, with a 6.9 ratio; and

Veolia Environment


, with a 1.9 ratio.


(SSYS) - Get Report

is another heavily shorted Nasdaq stock, with a short ratio of 43.2. This manufacturer of three-dimensional printing and direct digital manufacturing systems reported a 20.3% increase in earnings for the latest quarter on a 12.3% revenue increase. The stock has a P/E of 32 and a PEG of 1.31.

Stratasys shows up in a Stockpickr portfolio called

Barron's Take On Technology Stocks 12-15-2007

, which includes a take on technology stocks by various money managers.

For more heavily shorted Nasdaq stocks, check out the

Top Nasdaq Short-Squeeze Plays

portfolio at


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