Lockheed Martin's ( LMT) reprieve from "heavily shorted" status didn't last long. This defense contracting giant has been on short sellers' radar for some time now, held lower as U.S. defense budget cuts pose a major risk to LMT's revenues. Lockheed's short ratio of 11.4 means that it would take more than two weeks of buying pressure for short sellers to cover their positions at current volume levels. With the threat of a budget pullback, Lockheed has been pushing two big initiatives: IT services and international sales. Lockheed's IT services arm is already the federal government's biggest IT contractor, but the firm wants to court new agencies that aren't related to defense spending. At the same time, spreading its traditional defense business to our allies abroad is another way to escape potential budget cuts at home. To date, Congress has approved Lockheed's international sales, but that added oversight creates potential risks to the firm. Financially, Lockheed Martin is in good shape, with ample liquidity on its balance sheet and the wherewithal to maintain its hefty dividend. Politics are likely to keep shorts in Lockheed for the time being -- but a resolution of some of the more pressing federal budgetary issues could spur buying in this stock. Lockheed, one of the top-yielding aerospace and defense stocks, shows up on a recent list of Top-Ranked High-Yield & High-Dividend-Growth Stocks.