Do you like searching for potential short squeeze candidates? Short squeezes occur when highly shorted stocks see an uptick in price, which sets off a cascade of short covering that supports a stock rally.
For ideas, we ran a screen on stocks under $5 that are highly shorted, with float shorts above 10%. We then screened for those on winning streaks over the last month, with a persistence of days in which the stock beat the S&P 500 and little persistence of days in which it underperformed the S&P 500. We measured this by the ratio of days of its longest winning streak over the past month over the number of days of its longest losing streak.
‪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.
Do you think these stocks are likely short squeeze candidates? Use this list as a starting point for your own analysis.
1. Corinthian Colleges Inc. (COCO): Operates as a post-secondary career education company in the United States and Canada. Float short at 29.71%. Price at $4.98. The stock's average daily alpha vs. the S&P500 index stands at 2.89% (measured close to close, over the last month). During this period, the longest winning streak lasted 6 days (i.e. the stock's daily returns outperformed the S&P 500 for 6 consecutive days). The longest losing streak lasted 2 days (i.e. a win streak / losing streak ratio of 3.).
2. China Sunergy Co. Ltd. (CSUN): Designs, develops, manufactures, and sells solar cells and solar modules. Float short at 55.14%. Price at $2.70. The stock's average daily alpha vs. the S&P500 index stands at 2.49% (measured close to close, over the last month). During this period, the longest winning streak lasted 5 days (i.e. the stock's daily returns outperformed the S&P 500 for 5 consecutive days). The longest losing streak lasted 2 days (i.e. a win streak / losing streak ratio of 2.5).
3. Miller Petroleum, Inc. (MILL): Engages in the exploration, production, and drilling of oil and natural gas resources in the United States. Float short at 18.02%. Price at $4.83. The stock's average daily alpha vs. the S&P500 index stands at 2.31% (measured close to close, over the last month). During this period, the longest winning streak lasted 4 days (i.e. the stock's daily returns outperformed the S&P 500 for 4 consecutive days). The longest losing streak lasted 1 day (i.e. a win streak / losing streak ratio of 4.).
4. MPG Office Trust, Inc. (MPG): Engages in the ownership, management, acquisition, and development of office and real estate properties primarily in California. Float short at 12.39%. Price at $2.53. The stock's average daily alpha vs. the S&P500 index stands at 1.2% (measured close to close, over the last month). During this period, the longest winning streak lasted 5 days (i.e. the stock's daily returns outperformed the S&P 500 for 5 consecutive days). The longest losing streak lasted 2 days (i.e. a win streak / losing streak ratio of 2.5).
5. Radian Group Inc. (RDN): Provides credit-related insurance coverage and financial services in the United States and internationally. Float short at 22.62%. Price at $3.74. The stock's average daily alpha vs. the S&P500 index stands at 0.95% (measured close to close, over the last month). During this period, the longest winning streak lasted 10 days (i.e. the stock's daily returns outperformed the S&P 500 for 10 consecutive days). The longest losing streak lasted 4 days (i.e. a win streak / losing streak ratio of 2.5).
*Price data sourced from Yahoo! Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
