Plum Creek Timber

Plum Creek Timber ( PCL) is turning out a strong year in 2012, up close to 15% while the broad market has only managed around 10%. Tack on the 4% dividend yield that Plum Creek pays out, and the outperformance grows substantially.

Plum Creek is a timber REIT that owns 6.6 million acres of timberland spread across 19 states. That makes the firm one of the biggest private landowners in the U.S., and the biggest timber REIT on the market today. But that doesn't mean that PCL's business is relegated to timber -- the firm has been courting recreational uses for its land holdings in an effort to extract more value from its land than logging. So far, that approach has been panning out.

REITs really only exist for one thing: income. Because of their tax-advantaged status, real estate investment trusts are able to pass through the vast majority of their incomes directly to shareholders and avoid taxes (PCL does pay taxes on some of its earnings that aren't covered under its REIT structure). That also means that a dividend shortfall is a big downside catalyst that short sellers have their eyes on. Shorts have pushed PCL's short interest ratio to 11.9, making this large landowner a solid candidate for a short squeeze.

Shaw Communications

With more than 3 million subscribers in Canada and the U.S., Calgary-based Shaw Communications ( SJR) is a major provider of TV, internet, and phone services. Income investors take note -- not only does Shaw pay out a hefty 4.57% yield, it also pays it to investors on a monthly basis. But those big dividend checks haven't spared Shaw from heavy short selling pressure. Currently, the firm has a short-interest ratio of 32.3, which means it would take a month and a half of buying pressure for shorts to cover right now.

Shaw's foray into the mobile phone business is a big deal. The move makes Shaw more competitive with rivals that offer a bigger suite of services, and the firm was able to acquire wireless spectrum at a bargain price. That's not to say that the communications business isn't capital intense -- it is. But Shaw's existing infrastructure helped to greatly reduce the costs of building out a wireless carrier arm, and the payoff should be immediate, as customers pile into lucrative bundled deals.

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