10 Highly Shorted Stocks With Strong Profitability

by: Kapitall

Do you like searching for potential short squeeze candidates? If so, we ran a screen you might be interested in.

We began by screening for highly shorted stocks, with float shorts above 20%. We then screened for those with impressive profitability, with higher TTM gross, operating, and pretax margins than their industry peers. This indicates that these companies are taking a higher percentage of revenues as profits than their peers.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six 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 candidates for a short squeeze? Use this list as a starting point for your own analysis.

1. CARBO Ceramics Inc. (NYSE:CRR): Manufactures and supplies ceramic proppants primarily used in the hydraulic fracturing of natural gas and oil wells in the United States and internationally. Float short at 29.20%. TTM gross margin at 47.58% vs. industry average at 34.76%. TTM operating margin at 31.83% vs. industry average at 18.68%.TTM pretax margin at 31.56% vs. industry average at 16.04%.

2. ITT Educational Services Inc. (NYSE:ESI-OLD): Offers postsecondary-degree programs in the U.S. that provide diplomas as well as associate's, bachelor's, and master's degrees. Float short at 38.61%. TTM gross margin at 64.99% vs. industry average at 52.06%. TTM operating margin at 33.81% vs. industry average at 20.74%.TTM pretax margin at 33.88% vs. industry average at 17.82%.

3. Netflix, Inc. (NASDAQ:NFLX): Provides subscription based Internet services for TV shows and movies in the United States and internationally. Float short at 20.42%. TTM gross margin at 62.54% vs. industry average at 39.76%. TTM operating margin at 12.02% vs. industry average at 10.23%.TTM pretax margin at 11.22% vs. industry average at 9.6%.

4. Robbins & Myers Inc. (NYSE:RBN): Supplies engineered equipment and systems for various applications in energy, industrial, chemical, and pharmaceutical markets worldwide. Float short at 20.72%. TTM gross margin at 41.01% vs. industry average at 32.6%. TTM operating margin at 20.33% vs. industry average at 13.2%.TTM pretax margin at 17.45% vs. industry average at 11.13%.

5. RPC Inc. (NYSE:RES): Provides a range of oilfield services and equipment to the oil and gas companies primarily in the United States. Float short at 26.86%. TTM gross margin at 45.15% vs. industry average at 34.76%. TTM operating margin at 26.85% vs. industry average at 18.68%.TTM pretax margin at 26.46% vs. industry average at 16.04%.

6. Chemical & Mining Co. of Chile Inc. (NYSE:SQM): Engages in the production and sale of fertilizers and specialty chemicals in Chile and internationally. Float short at 40.74%. TTM gross margin at 46.89% vs. industry average at 37.53%. TTM operating margin at 34.11% vs. industry average at 17.54%. TTM pretax margin at 31.% vs. industry average at 16.51%.

7. Strayer Education Inc. (NASDAQ:STRA): Provides various academic programs through traditional classrooms and Internet. Float short at 23.67%. TTM gross margin at 56.89% vs. industry average at 52.06%. TTM operating margin at 28.55% vs. industry average at 20.74%.TTM pretax margin at 27.97% vs. industry average at 17.82%.

8. Teavana Holdings, Inc. Common S (TEA): Operates as a specialty retailer of loose-leaf teas, teawares, and other tea-related merchandise. Float short at 43.10%. TTM gross margin at 64.24% vs. industry average at 37.99%. TTM operating margin at 17.88% vs. industry average at 10.04%.TTM pretax margin at 16.44% vs. industry average at 9.2%.

9. USANA Health Sciences Inc. (NYSE:USNA): Develops, manufactures, distributes, and sells nutritional and personal care products worldwide. Float short at 32.76%. TTM gross margin at 82.53% vs. industry average at 70.82%. TTM operating margin at 13.28% vs. industry average at 13.18%.TTM pretax margin at 13.31% vs. industry average at 10.49%.

10. Vera Bradley Designs, Inc. (NASDAQ:VRA): Engages in the design, production, marketing, and retail of functional accessories for women under the Vera Bradley brand. Float short at 55.78%. TTM gross margin at 58.02% vs. industry average at 53.73%. TTM operating margin at 18.79% vs. industry average at 16.25%.TTM pretax margin at 20.36% vs. industry average at 15.4%.

*Profitability data sourced from Fidelity, 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.