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If you're looking for short squeeze ideas, the following list might offer an interesting starting point.

Here is a list of highly shorted stocks (short float > 15%), that are generating significant amounts of free cash flow, when expressed as a percentage of market cap.

To compile the list, we started with a universe of about 120 highly shorted stocks. We then collected data on levered free cash flow, and identified the companies that have significant levered free cash flow, when compared to current valuations. (Note: Levered free cash flow is the free cash flow available to the company after paying interest on outstanding debt. It is a measure of the cash flow that is truly available to the company).

As these companies continue to generate significant amounts of cash, will short sellers get squeezed out of their trades? What do you think? Full details below.

Short float data sourced from Finviz, levered free cash flow data sourced from Yahoo! Finance.



List sorted by levered free cash flow as a percentage of market cap.

1. Dillard's Inc. (NYSE:DDS): Department Stores Industry. Market cap of $2.46B. Short float at 21.98%. TTM levered free cashflow at $394.62M, which represents about 16.06% of the company's current market cap. Note that this is a risky stock that is significantly more volatile than the overall market (beta = 2.53). The stock has had a couple of great days, gaining 13.94% over the last week.

2. Bridgepoint Education, Inc. (NYSE:BPI): Education & Training Services Industry. Market cap of $997.06M. Short float at 18.42%. TTM levered free cashflow at $158.82M, which represents about 15.93% of the company's current market cap. The stock has had a couple of great days, gaining 20.32% over the last week.

3. Cephalon Inc. (NASDAQ:CEPH): Biotechnology Industry. Market cap of $4.19B. Short float at 19.06%. TTM levered free cashflow at $670.61M, which represents about 16.01% of the company's current market cap. It's been a rough couple of days for the stock, losing 16.11% over the last week.

4. DineEquity, Inc. (NYSE:DIN): Restaurants Industry. Market cap of $980.11M. Short float at 16.34%. TTM levered free cashflow at $144.47M, which represents about 14.74% of the company's current market cap. The stock has had a good month, gaining 40.29%.

5. InterDigital, Inc. (NASDAQ:IDCC): Wireless Communications Industry. Market cap of $2.0B. Short float at 17.42%. TTM levered free cashflow at $280.14M, which represents about 14.0% of the company's current market cap. After a solid performance over the last year, IDCC has pulled back during recent sessions. The stock is -13.5% below its SMA20 and -7.32% below its SMA50, but remains 32.94% above its SMA200. The stock has had a couple of great days, gaining 25.68% over the last week.

6. Cheniere Energy, Inc. (NYSEMKT:LNG): Oil & Gas Drilling & Exploration Industry. Market cap of $560.84M. Short float at 15.59%. TTM levered free cashflow at $62.86M, which represents about 11.21% of the company's current market cap.

7. Cal-Maine Foods, Inc. (NASDAQ:CALM): Farm Products Industry. Market cap of $648.96M. Short float at 26.93%. TTM levered free cashflow at $71.89M, which represents about 11.08% of the company's current market cap. It's been a rough couple of days for the stock, losing 15.07% over the last week.

8. The Children's Place Retail Stores, Inc. (NASDAQ:PLCE): Apparel Stores Industry. Market cap of $1.13B. Short float at 20.83%. TTM levered free cashflow at $115.85M, which represents about 10.26% of the company's current market cap. The stock has lost 16.19% over the last week.

9. Hormel Foods Corp. (NYSE:HRL): Meat Products Industry. Market cap of $7.22B. Short float at 55.55%. TTM levered free cashflow at $695.21M, which represents about 9.62% of the company's current market cap. The stock has gained 9.75% over the last week.

10. JetBlue Airways Corporation (NASDAQ:JBLU):
Regional Airlines Industry. Market cap of $1.63B. Short float at 18.22%. TTM levered free cashflow at $159.62M, which represents about 9.78% of the company's current market cap. It's been a rough couple of days for the stock, losing 19.71% over the last week.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Squeeze Ideas: Highly Shorted Stocks With Significant Free Cash Flow