BALTIMORE (Stockpickr) -- Investors got a chance to see a large-scale short squeeze in play on Monday as traders who were short the Euro were forced to cover their positions. The currency climbed earlier this week thanks to eased concerns about Greece's debt outlook, a situation that threatened to tarnish the EU's formerly spotless economic track record. But short squeezes aren't relegated to FX traders. This week, we'll take a look at highly shorted companies that generate significant free cash flow.
AmeriCredit ( ACF) is an auto finance company that buys auto finance contracts from its network of new and used car dealers. As such, the company hasn't been a stranger to bearish sentiment in the last couple of years, but a potential turnaround in the auto finance industry could spur shares on in the next few weeks as earnings time starts to creep up again. ACF's current short interest ratio sits at 11.6, which means that it would take short-sellers more than two weeks to cover their positions under current volume levels.
Another potential short squeeze in the auto industry is Group 1 Automotive ( GPI), an $806 million car dealer that owns 98 dealerships and 24 collision centers in the U.S. and the U.K. Group 1 benefits from the same macro story that AmeriCredit is benefiting from right now -- increased car sales volume -- but the company's ambitious expansion into Europe presents its greatest growth opportunities.
Industrial cable and wire distributor Anixter International ( AXE) has been just barely underperforming the broad market in 2010, but that trend could soon change if the company can deliver decent fundamental performance in its next quarter. As of right now, Anixter's short interest ratio sits at 10.4.