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If you like to go with the trend, then you may want to do further research on some of the very profitable names in this article...

To construct this list we looked for stocks with market cap above $300M, short float above 10% and trading above the 20-day, 50-day and 200-day moving averages.

Once we got this universe of over 50 stocks, we compared each of these names’ against their industry average and kept only those that outperformed its peers in each of the following metrics:

- Gross margin
- Operating margin
- Pretax margin

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.


We also created a price-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.


Considering these data points, which of these stocks do you think has the most upward momentum moving forward?

1. Bridgepoint Education, Inc. (NYSE:BPI): Education & Training Services Industry. Market cap of $1.28B. This stock is 7.09% above its 20-day MA, 22.75% above its 50-day MA, and 39.87% above its 200-day MA. Gross margin at 75.31% vs. industry average at 53.2%. Operating margin at 32.09% vs. industry average at 22.06%. Pretax margin at 32.32% vs. industry average at 18.39%. The stock is a short squeeze candidate, with a short float at 16.23% (equivalent to 14.86 days of average volume).The stock has had a good month, gaining 14.23%.

2. Bally Technologies, Inc. (NYSE:BYI): Gaming Activities Industry. Market cap of $1.95B. This stock is 0.59% above its 20-day MA, 0.07% above its 50-day MA, and 1.34% above its 200-day MA. Gross margin at 71.9% vs. industry average at 36.89%. Operating margin at 21.09% vs. industry average at 18.41%. Pretax margin at 20.19% vs. industry average at 15.93%. The stock is a short squeeze candidate, with a short float at 11.1% (equivalent to 6.75 days of average volume). The stock has lost 10.09% over the last year.

3. Core Laboratories NV (NYSE:CLB): Oil & Gas Equipment & Services Industry. Market cap of $4.77B. This stock is 5.53% above its 20-day MA, 8.32% above its 50-day MA, and 15.63% above its 200-day MA. Gross margin at 35.43% vs. industry average at 35.18%. Operating margin at 28.13% vs. industry average at 17.81%. Pretax margin at 26.48% vs. industry average at 15.77%. The stock is a short squeeze candidate, with a short float at 15.52% (equivalent to 15.57 days of average volume). The stock has had a good month, gaining 12.14%.

4. Netflix, Inc. (NASDAQ:NFLX): Music & Video Stores Industry. Market cap of $13.71B. Short float at 22.09%. This stock is 0.93% above its 20-day MA, 6.0% above its 50-day MA, and 30.14% above its 200-day MA. Gross margin at 53.92% vs. industry average at 37.13%. Operating margin at 13.53% vs. industry average at 9.67%. Pretax margin at 13.05% vs. industry average at 8.74%. The stock has gained 111.44% over the last year.

5. ZAGG Incorporated (NASDAQ:ZAGG):
Specialty Retail, Other Industry. Market cap of $307.22M. This stock is 19.71% above its 20-day MA, 32.52% above its 50-day MA, and 57.1% above its 200-day MA. Gross margin at 48.86% vs. industry average at 36.22%. Operating margin at 21.56% vs. industry average at 15.12%. Pretax margin at 21.37% vs. industry average at 14.19%. The stock is a short squeeze candidate, with a short float at 57.82% (equivalent to 6.76 days of average volume). The stock has had a couple of great days, gaining 18.96% over the last week.

*Data sourced from Fidelity and Finviz.

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

Source: 5 Highly Shorted and Profitable Stocks in Rally Mode