Lifeway Foods ( LWAY) isn't a health stock in the traditional sense.
The $201 million company manufactures health food products, including cheeses, spreads and energy bars. Its flagship product is Kefir, a drinkable probiotic yogurt drink that promoted digestive health and comes in both dairy and soy varieties. What makes this small stock stand out is its incredibly high short-interest ratio, a gauge of how long it would take for short sellers to cover their positions. Lifeway has a short ratio of 77.6 right now -- the higher the short ratio, the higher the potential profits when the shorts get squeezed -- which means it would take nearly 16 weeks of average trading volume for shorts to get out. That's a colossal short-squeeze opportunity. And there's plenty going for this stock right now that makes shares worth taking a closer look at right now. In addition to making the Fortune Small Business list of fastest-growing companies for four straight years, Lifeway's business has already been deemed attractive to others in the industry. $32 billion yogurt giant Groupe Danone ( DANOY) owns a 20% stake in Lifeway that it's been holding on to since 1999. While the company's products have traditionally been the domain of health food stores, a distribution deal penned in December gives Lifeway products shelf space at convenience store giant 7-Eleven in 275 stores in the Chicagoland area, with plans to expand to convenience chains nationally by mid 2010. That could be just the catalyst that this stock needs to trigger shorts to run for the hills -- and to rocket Lifeway shares in the process.