Updated from 10:07 a.m. EDT
Many investors are on the constant lookout for significant upward movement in stocks on a short-term basis. One way that an investor can make a quick gain is through a short-squeeze play.
A short squeeze takes place when a stock's short-sellers cover their positions quickly when good news boosts the price of the stock. This short-covering often drives the stock price even higher. The 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 position based on the stock's recent average daily volume.
Stockpickr has come up with a list of the stocks on the
New York Stock Exchange
with high short interest and compiled them here:
One of the stocks with a high short ratio is
, a manufacturer of building products, including wood-to-wood, wood-to-concrete and wood-to-masonry connectors, adhesives and mechanical anchors. The stock has a short ratio of 47.9. The company just announced its first-quarter earnings and reported that its net income decreased by 51.7%. The stock has a P/E of 20, a PEG of 1.53 and a yield of 1.7%.
Simpson is owned by
, which was named one of the seven funds to own in 2007 by
magazine. The fund has had an average return of 17.1% over the last five years. The fund also owns
Woodward Governor Company
( WGOV), which has a short ratio of 5.1;
Lincoln Electric Holdings
, with a short ratio of 4.8; and
Oil States International
, with a short ratio of about 8.
Another stock with a high short ratio is
NorthStar Realty Finance
, with a short ratio of about 34. This debt-oriented commercial real estate investment trust just reported that first-quarter revenues were up 18% and net income was 35 cents per share vs. 39 cents per share for the first quarter of 2007. The stock has a P/E of 2.8, a PEG of about 1 and a yield of 14%.
NorthStar shows up in the Stockpickr portfolio
for December 29, 2007, which listed extremely high-yielding stocks. Other stocks in the portfolio include
, which has a short ratio of 21.1, and
, with a 24 short ratio.
Tootsie Roll Industries
is another heavily shorted stock, carrying a short ratio of 25.7. This candy stock rose along with several other confectionary stocks last month when Warren Buffett agreed to buy
( WWY) for $23 billion. The stock has a P/E of 26 and a yield of 1.4%.
Tootsie Roll is owned by the
, which has a four-star Morningstar rating and is managed by Robert Costomiris. The fund has had an average return of 19.1% over the last five years. It also holds
. which has a short ratio of 2.1, and another candy company,
, with a 7.3 short ratio.
To see the complete list, check out the
portfolio at Stockpickr.com.
Stockpickr is a wholly owned subsidiary of TheStreet.com.