Short squeeze candidates include stocks that are heavily shorted and then experience price jumps, forcing short sellers to exit their short positions. Short sellers borrow stocks and then bet on a price fall so that they can make some profits, but in a short squeeze play, they may end up making losses instead. As the shorts exit their positions, the stock experiences further upward pressure, increasing the price more.
Although short squeeze candidates are a nightmare for short sellers, they can be a great stock find for regular investors. Today, we have four short squeeze candidates making big moves because of their relatively high short float. When a stock is shorted heavily, it means that the share price of the stock is likely going to surge, hurting short sellers but benefiting regular traders.
Here are three short squeeze candidates to keep an eye on:
3 Short Squeeze Candidates to Watch Next Week: AMAG Pharmaceuticals (NASDAQ:AMAG)
AMAG Pharmaceuticals specializes in the development and distribution of anemia management, cancer supportive care, and maternal health drugs. The company’s stock has a short float of 35.27%. Recently, the company announced that it attained record revenue in 2019 from Feraheme. The sales of Feraheme grew 24.4% last year to $167.9 million.
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However, AMAG’s other drug, the Makena subcutaneous auto-injector, generated sales of only $122.1 million last year, which was a 62.1% drop from the previous year. In Q2 last year, the company exited the intramuscular market because of supply issues and enhanced competition. This resulted in Makena IM generating negative revenue after a significant loss in the share market for the drug.
3 Short Squeeze Candidates to Watch Next Week: Washington Prime Group (NYSE:WPG)
Washington Prime Group has a short float of 43.88%. The Columbus-based mall proprietor has indicated that it is taking measures to enhance its financial position, as COVID-19 restrictions have kept most of its malls closed. The company has drawn down part of its $130 million remaining credit facility and has also canceled dividends for the rest of 2020 to conserve cash. These measures come after the company furloughed and laid off around 20% of its workforce and slashed executive salaries.
All of Washington’s indoor malls that are the major revenue drivers for the company remain closed. The company has equally warned that even when things return to normalcy, it will take time before the malls get significant traffic again, especially if social distancing remains in place. Washington Prime Group still has 58 open-air malls operating during the crisis, which represent around 40% of the company’s operating income.
3 Short Squeeze Candidates to Watch Next Week: Mid-Con Energy Partners LP (NASDAQ:MCEP)
Mid-Con Energy Partners is a publicly held limited partnership in Delaware, established in 2011 to acquire, develop, and own oil and gas producing properties in North America. The company’s stock has a short float of 31.54%. Recently, the company announced that its General Partner Board of Directors deferred a previously announced reverse stock split of the company’s common shares and also approved a different exchange ratio of 1 for 20 common shares.
According to the reverse share split, common shareholders will get one common share for each common shares held as of April 9, 2020. All the fractional units as a result of the reverse share split will be rounded to whole units as per the Mid-Con partnership agreement.
Bottom Line
These short squeeze candidates have a relatively high short float, which will allow traders to take advantage and potentially make some quick cash during these volatile times. Of course, nothing’s a sure bet, so it’s best to go in with as much information as possible before making any decisions.
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