By Jonas ElmerrajiBALTIMORE (Stockpickr) -- Riddled with debt, delivering mounting losses, and struggling to stay in business -- all factors that short--sellers salivate over when looking for a stock to bet against. But what happens when short-selling is predicated on product speculation instead of fundamental flaws?In that case, you've got the potential for a short squeeze on your hands. This week, we're looking at that exact situation, honing in on stocks that sport debt-free balance sheets in spite of heavy shorting. The implications of a short squeeze are pretty serious for shareholders. In case you're not familiar, a short squeeze is the buying frenzy that ensues when a heavily shorted stock starts to look attractive again to investors, causing share price to skyrocket. One of the best indicators of just how high a short-squeezed stock could go is the short interest ratio, which estimates the number of days it would take for short-sellers to cover their positions. The higher the short ratio, the higher the potential profits when the shorts get squeezed. Related: 5 Trades to Beat the Market Naturally, these plays aren't without their blemishes -- there's a reason that these stocks are being heavily shorted. And a solid balance sheet is hardly the only factor that investors should consider. But for investors looking for exposure to a speculative play with a beefier risk/reward tradeoff, these could be powerful upside plays for the coming year. With that, here's a look at heavily shorted debt-free stocks that could get squeezed higher.
FactSet Research Systems
Mindray Medical International Limited
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