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If you're interested in small cap momentum ideas, this may be an interesting starting point for your own analysis.

To construct this list we looked for stocks with the following characteristics:

  • Market cap above $100M
  • Trading price between $1-$5
  • Experienced a significant drop in shares shorted from March 15th to April 15th

click for expanded image

We also created an equal weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Short sellers think the upside potential outweighs the downside for these names, what do you think?

1. Abraxas Petroleum Corp. (NASDAQ:AXAS): Independent Oil & Gas Industry. Market cap of $354.45M. Price at $4.4. Shares shorted dropped from 11.42M to 8.94M shares. This change is equivalent to 4.04% of the floating shares. The stock is a short squeeze candidate, with a short float at 10.86% (equivalent to 5.07 days of average volume). The stock has performed poorly over the last month, losing 17.44%.

2. Arena Pharmaceuticals, Inc. (NASDAQ:ARNA): Biotechnology Industry. Market cap of $163.90M. Price at $1.33. Shares shorted dropped from 32.52M to 28.11M shares. This change is equivalent to 3.99% of the floating shares. The stock is a short squeeze candidate, with a short float at 23.37% (equivalent to 14.55 days of average volume). The stock has lost 59.82% over the last year.

3. Advanced Battery Technologies, Inc. (OTCPK:ABAT): Industrial Electrical Equipment Industry. Market cap of $122.30M. Price at $1.54. Shares shorted dropped from 9.69M to 7.85M shares. This change is equivalent to 2.74% of the floating shares. The stock is currently stuck in a downtrend, trading -17.47% below its SMA20, -42.78% below its SMA50, and -56.03% below its SMA200. It's been a rough couple of days for the stock, losing 5.88% over the last week.

4. BPZ Resources, Inc. (NYSE:BPZ): Oil & Gas Drilling & Exploration Industry. Market cap of $502.37M. Price at $4.1. Shares shorted dropped from 16.58M to 15.25M shares. This change is equivalent to 2.19% of the floating shares. This is a risky stock that is significantly more volatile than the overall market (beta = 2.22). The stock is a short squeeze candidate, with a short float at 17.48% (equivalent to 7.57 days of average volume). The stock has performed poorly over the last month, losing 15.59%.

5. Corinthian Colleges Inc. (NASDAQ:COCO): Education & Training Services Industry. Market cap of $353.67M. Price at $4.14. Shares shorted dropped from 26.17M to 24.74M shares. This change is equivalent to 1.86% of the floating shares. The stock is a short squeeze candidate, with a short float at 32.11% (equivalent to 8.36 days of average volume). The stock has performed poorly over the last month, losing 16.57%.

6. Alliance One International, Inc. (NYSE:AOI): Tobacco Products, Other Industry. Market cap of $349.19M. Price at $4.02. Shares shorted dropped from 7.96M to 6.81M shares. This change is equivalent to 1.7% of the floating shares. The stock is a short squeeze candidate, with a short float at 8.28% (equivalent to 12.58 days of average volume). The stock has lost 19.8% over the last year.

7. Wet Seal Inc. (WTSLA): Apparel Stores Industry. Market cap of $498.02M. Price at $4.79. Shares shorted dropped from 18.35M to 16.87M shares. This change is equivalent to 1.58% of the floating shares. The stock is a short squeeze candidate, with a short float at 17.31% (equivalent to 7.05 days of average volume). The stock has had a couple of great days, gaining 14.45% over the last week.

8. China Valves Technology, Inc. (OTC:CVVT): Industrial Equipment & Components Industry. Market cap of $141.97M. Price at $3.71. Shares shorted dropped from 4.36M to 4.10M shares. This change is equivalent to 1.51% of the floating shares. The stock is a short squeeze candidate, with a short float at 19.71% (equivalent to 7.4 days of average volume). The stock has lost 60.12% over the last year.

9. Novavax, Inc. (NASDAQ:NVAX): Biotechnology Industry. Market cap of $263.43M. Price at $2.33. Shares shorted dropped from 9.23M to 8.17M shares. This change is equivalent to 1.08% of the floating shares. This is a risky stock that is significantly more volatile than the overall market (beta = 2.28). The stock is a short squeeze candidate, with a short float at 8.35% (equivalent to 5.84 days of average volume). The stock has lost 12.96% over the last year.

10. Beazer Homes USA Inc. (NYSE:BZH): Residential Construction Industry. Market cap of $310.83M. Price at $4.13. Shares shorted dropped from 15.43M to 14.77M shares. This change is equivalent to 1.03% of the floating shares. The stock is a short squeeze candidate, with a short float at 19.6% (equivalent to 7.26 days of average volume). The stock is currently stuck in a downtrend, trading -7.58% below its SMA20, -8.73% below its SMA50, and -9.68% below its SMA200.

*Short data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: Small Cap Momentum Ideas: 10 Stocks Under $5 Boosted by Short Covering