Top S&P 500 Short-Squeeze Stocks
With the many huge upward and downward spikes taking place in the stock market recently, opportunities for short-squeeze plays abound.
A short squeeze takes place when the
short-sellers in a stock scramble to cover their bearish positions when that stock moves sharply upward; their buying ends up pushing shares even higher. Short positions of stocks are measured by the short-squeeze ratio, which represents the number of days it would take for the short-sellers to cover their positions based on the recent daily volume of the stock.
Stockpickr recently reviewed the stocks in the
S&P 500
index, extracted the stocks that have the highest short ratios as well as price/earnings-to-growth (PEG) ratios below 2 and compiled them in the
Top S&P 500 Short-Squeeze Stocks
.
One of the stocks on the list is
Quest Diagnostics
(DGX) - Get Report
, with a short ratio of 24. This health care diagnostic-testing company just received clearance from the Food and Drug Administration for two point-of-care tests, a whole blood test and a herpes simplex type-2 virus test. The stock has a
P/E ratio of 21.5, a PEG of 1.4 and a yield of 0.7%.
Quest shows up in an interesting Stockpickr portfolio called
Bleak Friday's (Oct. 19, 2007) Survivors -- Part I
, which includes such stocks as
Hansen Medical
(HNSN)
, with a short ratio of 4.6, and
IntercontinentalExchange
(ICE) - Get Report
, with a 2.3 short ratio.
Jones Apparel Group
(JNY)
is another S&P 500 stock with a high short ratio. It would take 15.7 days for the short-sellers to cover their positions based on recent trading volume. The retailer recently delivered a solid third-quarter earnings beat. The stock has a P/E of 15, a PEG of 1.4 and a yield of 2.7%.
Jones is on the
Vogue September '07 Advertisers List
, a portfolio on Stockpickr that lists the publicly traded companies that advertise in the high-end fashion magazine. Other Vogue stocks on the list are
Luxottica Group
(LUX)
, which has a 2.7 short ratio,
Nike
(NKE) - Get Report
, with a short ratio of 2, and
Allergan
(AGN) - Get Report
, with a 4.2 short ratio.
Then there's
International Flavors & Fragrances
(IFF) - Get Report
, a stock with a 13.1 short ratio. It recently reported third-quarter results that revealed a 13% year-over-year increase in earnings per share (before items) on 8% revenue growth.
IFF is owned by
(ABMIX), a fund that's generated a one-year return of 17% plus. Its holdings include
Unisys
(UIS) - Get Report
, with a short ratio of 6.3, and
Andrew Corp.
( ANDW), with a short ratio of 3.
For more S&P 500 stocks with high short ratios and PEG ratios below 2, check out the
Top S&P 500 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;
to send him an email.
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