Columbia Sportswear

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Small-cap sportswear maker Columbia Sportswear ( COLM) is a perfect example of a heavily shorted apparel firm worth looking at for long investors.

It's been a challenging year for Columbia: in 2011, shares of this firm have slid more than 21% as one of the warmest winters of history tempered investor expectations over this outerwear-centric business. Even though it's hardly been a banner year for Columbia, this brand has the right positioning to make a move higher into 2012.

While competition is fierce in the sportswear category, Columbia's established brand name gives the firm advantages over less recognizable peers. At the same time, the firm has been finding growth in its Mountain Hardwear, Sorel, and Montrail labels -- offerings that are starting to prove popular abroad. Even though the U.S. market is fairly cramped, overall consumer spending increases have the potential to lift all ships in this low-tide market.

From a financial standpoint, Columbia is in excellent shape. The firm has a debt-free balance sheet and has been aggressively paying out dividends to shareholders. That's thanks in large part to the fact that this family-managed business is still 63% owned by the Boyle family. That aligns management's interests with those of outside shareholders.

In the meantime, a short interest ratio of 10.8 means that it would take more than two weeks of buying for shorts to exit their positions at current volume levels.That makes Columbia a prime candidate for a moderate short squeeze.

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