Short squeeze stocks are a subject frequently mentioned on social media, and rightfully so. A short squeeze occurs when a heavily shorted stock moves higher. As the stock moves higher, traders who shorted the company must buy back borrowed shares at a higher price, sending the stock price even higher as a result. These short squeezes provide a great opportunity for traders to gain profit as a result of short sellers being forced to capitulate.
Fintel analyzes potential short-squeeze candidates and ranks them on a scale of 0-100, with 100 meaning that a short squeeze is extremely likely and 0 meaning a short squeeze is very unlikely. Its proprietary ranking system is based on several factors, such as borrow fee rates, short interest as a percentage of float, and volume.
With that said, let’s take a look at the top 5 short squeeze stocks based on Fintel’s proprietary model.
Top Short Squeeze Stocks
- Pioneer Power Solutions (NASDAQ:PPSI) leads the list of short squeeze candidates with a score of 99.31. The energy company is up 29% today and 123% the past month after recently launching a mobile electric vehicle (EV) charging solution. However, short interest ballooned to 1.6 million shares in mid-November as doubters of the company believe it is overvalued. The short interest makes up 40.9% of the float, up 5,000% from the end of October.
- NuZee (NASDAQ:NUZE) falls in second with a score of 96.92. What’s most striking about NuZee is that the cost to borrow shares is 136%. NUZE stock recently climbed from a low of $1.95 to a high of $7.60 before settling down at $3.75 last week. In response, the raw short interest increased from 74,900 shares to 1.29 million shares, up 1,621%.
- Newegg Commerce (NASDAQ:NEGG) carries a short squeeze score of 96.07. Short interest increased 102% during the first week of November, from 1.04 million shares to 2.1 million shares. During the past month, shares of NEGG stock have increased a whopping 67%.
- RenovoRx (NASDAQ:RNXT) scored 94.61 on Fintel’s short squeeze model. Like NuZee, RenovoRx carries an extremely high borrow rate of 101.7%. Raw short interest jumped from 42,000 shares at the end of October to 643,000 shares in mid-November, representing an increase of 1,407%. The short interest comprises 9.74% of the total float.
- TDH Holdings (NASDAQ:PETZ) falls in last place with a score of 94.49. PETZ stock has increased by a massive 183% the past month as short sellers pile in. Raw short interest at the end of October was 41,000. By mid-November, that figure had jumped to 2.56 million shares, an increase of 6,000%. Short interest as a percentage of float currently tallies in at 7.28%.
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On the date of publication, Eddie Pan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.