We are introducing our improved short squeeze screen. The idea behind it is simple:
* Heavily shorted stocks,
* where short exposure has increased meaningfully very recently and
* where the stock price is rising fast,
create the perfect conditions for squeezes. Weak short hands could be forced out on market-moving news.
The screen highlights those companies that are reporting earnings in the next 14 days, providing a potential catalyst for a squeeze. (See the columns in red on the right hand side.)
Our Short Update report, which contains this model, details on where short investors are increasing exposure and charts of stocks with spikes and drops in short interest, can be found here: SU 20171018
The market value of short interest increased by 2.9% ($18.6) billion over the past 30 days. Net new active shorting increased by $12.7 bn. The strongest short activity was seen in Finance, Retail Trade and Consumer Services. The weakest short activity was seen in Health Technology, Technology Services and Consumer Non-Durables (Chart 2). Consumer Durables, Minerals and Distribution Services have the highest Short interest to shares outstanding (SISO, Chart 3).
Short interest spikes in Finance include Primerica, Inc. (PRI) and LPL Financial Holdings Inc. (LPLA). In Retail Trade, spikes include Lands’ End, Inc. (LE), Big Lots, Inc. (BIG) and Ascena Retail Group, Inc. (ASNA),
Stocks at risk of short squeeze include Financial Engines Inc (FNGN), Encore Capital Group Inc (ECPG), Gamestop Corp (GME), Theravance Inc (THRX), Myriad Genetics Inc (MYGN), Neustar Inc (NSR), Athenahealth Inc (ATHN) and Iridium Communications Inc (IRDM).
Click here for the report.