Anyone who shorted Apple ( AAPL) over the last few months would have been in sorry shape because of a "short squeeze." A short squeeze is when traders who have shorted a particular stock scramble to cover their positions, driving up the price of the stock.

Not all the computer companies have risen as much as Apple, but some are heavily shorted, and on any good news, they could shoot upward. Stockpickr reviewed the list of computer companies and came up with the top 10 most heavily shorted computer stocks based on the short ratio.

The short ratio is also referred to as the "Days to Cover Ratio," which is the number of days short-sellers would need to cover their positions based on the average daily trading volume of shares. Stocks with the higher short ratios can have greater upward price movements when unexpected good news is announced, such as revenue coming in greater-than-expected or possible takeover rumors.

At the top of the list is Silicon Graphics ( SGIC), with a short ratio of 27, which means that it would take the short sellers more than 27 days to cover their positions based on the current volume.

The company just filed its 10K with the SEC in mid-September and reported an 11% drop in revenue over the prior year. However, the comparison is difficult because the prior year involved a predecessor company and bankruptcy court. The stock has a price-to-earnings ratio of 28.

Silicon Graphics shows up in the portfolio of Schultze Asset Management, a $435 million fund that focuses on distressed securities. Other stocks that Schultze owns are Krispy Kreme ( KKD), with a short ratio of 9.1, Owens Corning ( OC), whose short ratio is 11, and Verizon ( VZ), with the lowest ratio of 2.

Palm ( PALM) is the second highest on the list with a short ratio of 13. Palm just unveiled its latest smart phone, the Palm Centro that is lighter, thinner and less expensive than the company's Treo products. Palm has a P/E of 30 and a P/E to growth ratio of 3.2.

Palm was just listed on the Rising On Unusual Volume NASDAQ Sept. 14, 2007 portfolio at Stockpickr. The portfolio also includes stocks like China Finance Online ( JRJC), which has a short ratio of 0.9, Equinix ( EQIX), with an 8.7 short ratio, and ISIS Pharmaceuticals ( ISIS), coming in at a 6.6 short ratio.

Another computer contender for the high short ratio list is Adaptec ( ADPT). The data storage company has a short ratio of 12.1 and a P/E of 9. Adaptec announced on Sept. 10 its Snap Server 700i series of iSCSI storage devices that can deliver 1 to 36 terabytes of capacity.

Adaptec shows up in the interesting Stockpickr portfolio called Cash = 50% of Share Price. This list includes stocks that are holding cash equal to at least 50% of the share price. Other stocks in this portfolio include QLogic ( QLGC), with a short ratio of 2.0, and Sycamore Networks ( SCMR), whose short ratio is 5.7.

At Stockpickr.com, you can find the entire list of the top 10 short-squeeze computer stocks, based on the short ratio.
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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