Top Nasdaq Short-Squeeze Plays for April

These heavily shorted stocks, which trade on the Nazz, have the potential to surge on any positive catalyst.
Author:
Publish date:

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

Meridian Growth Fund

, 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

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.

TheStreet.com has a revenue-sharing relationship with Trader's Library under which it receives a portion of the revenue from purchases by customers directed there from TheStreet.com.