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NYSE Short-Squeeze Plays for the New Year - 8450 views
If you were watching the biggest-percentage gainers on Thursday, you would have noticed that Sears Holdings (SHLD), which trades on the Nasdaq, was up by almost 9.5 points, an increase of more than 23% in just one day.
This was likely due to a short squeeze. The stock has 16% of its shares shorted, and when the company's fourth-quarter earnings beat analysts' estimates, short-sellers scrambled to cover their positions, driving the stock much higher.
There are also plenty of heavily shorted stocks on the NYSE. Short-squeeze opportunities are measured by the short ratio, which is the number of days it would take the short-sellers to cover their position based on recent average daily volume.
One of the heaviest shorted NYSE stocks is USEC (USU), a supplier of low enriched uranium for commercial nuclear power plants. The stock has a short ratio of 17.8, which means that it would take almost 18 days for the short-sellers to cover their positions. The company is involved in the commercial nuclear mission organized by the U.S. India Business Council and the Nuclear Energy Institute, the largest nuclear mission in India. This low-priced stock which sells for less than $6 per share, has a somewhat unfavorable price-to-earnings ratio of 15, which is a bit high compared with the metals and minerals industry average of 9. The stock does not pay a dividend.
USEC shows up in the Stockpickr portfolio Top Uranium Stocks. Other stocks in the portfolio include BHP Billiton (BHP), with a short ratio of 1; Cameco (CCJ), with a short ratio of 2; and Rio Tinto (RTP), with a short ratio of 0.7.
Heartland Payment Systems (HPY) is another heavily shorted stock, with a short ratio of 18.7. The company is a provider of bank-card payment processing services to merchants. It just announced the launch of their its management systems utilizing service-oriented architecture, which will allow merchants to easily include check management services in their existing applications. The stock has P/E of 17 and pays a yield of 2%.
Last year, Heartland showed up in Stockpickr's Barron's Insider Purchases portfolio for Aug. 16. Other stocks on the list include Newmarket (NEU), with a short ratio of 3.9; Hologic (HOLX), with a 3.5 ratio; and Coach (COH), with a 1.6 ratio.
For more ideas, check out the NYSE Short-Squeeze Plays for the New Year portfolio on Stockpickr.
Posted on Jan. 12, 2009