Top Explosive Short-Squeeze Stocks

These 10 heavily shorted stocks could surge on any positive catalyst.
Author:
Publish date:

Updated from 6:32 a.m. EST

With the sharp stock market turnarounds we've had recently, especially the 600-point swing last Wednesday, there are plenty of opportunities to make money on potential short-squeeze plays.

A short squeeze takes place when short-sellers scramble to buy in their short positions on a stock that has started to rise on good news. When they start covering their bearish bets, the stock price is driven even higher. The American Stock Exchange is considered to be a more volatile market than the

New York Stock Exchange

, and therefore the short squeezes in Amex stocks can be even more explosive.

Stockpickr has reviewed the list of all the Amex stocks with market caps over $500 million and compiled the stocks with the highest short ratios, a measurement of how extensively shorted the stock is, in the

Top Amex Short-Squeeze Stocks

. The short ratio is the number of days it would take to cover a stock's short positions based on the stock's recent average trading volume.

Among the most heavily shorted Amex stocks is

Bio-Rad Laboratories

(BIO) - Get Report

, which has a short ratio of 12. This producer of specialty chemicals for life science research has a price-to-earnings (P/E) ratio of 20 and a P/E-to-growth ratio of 1.8.

Bio-Rad is also owned by the

University of Chicago Endowment

, the 13th largest endowment in the U.S. The endowment also holds

DeVry

(DV)

, which has a short ratio of 5,

Reliant Energy

(RRI)

, with a 4.4 short ratio, and

KB Home

(KBH) - Get Report

, which has a 6.4 ratio.

Another Amex stock with a high short interest ratio is

Badger Meter

(BMI) - Get Report

, a maker of liquid flow measurement products with a short ratio of 14. The company has scheduled its earnings call for Tuesday, Feb. 5. The stock has a trailing P/E of 42 and a PEG of 2.3. It pays a yield of 1%.

Badger is also in the portfolio of the

Heartland Value Fund

, which specializes in investing in companies with market caps of less than $1.5 billion. This fund also owns shares of

InterDigital

(IDCC) - Get Report

, with a short ratio of 7.4,

Swift Energy

(SFY) - Get Report

, with a 12 short ratio, and

Quintana Maritime

(QMAR)

, which has a short ratio of 1.7.

Grey Wolf

(GW)

is another Amex-traded stock with a short ratio of 8.6. The stock has a P/E of 6.5 and a PEG of 0.4.

Grey Wolf shows up in the Stockpickr portfolio called

Exploration & Production

, which lists oil and gas stocks like

Anadarko Petroleum

(APC) - Get Report

, with a short ratio of 3, and

Transocean

(RIG) - Get Report

, which has a short ratio of 2.6.

To see the full list of the top 10 Amex stocks with high short ratios, check out the

Top Amex Short-Squeeze Stocks

at 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

Stockpickr

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;

click here

to send him an email.

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