Most “Squeezable” U.S. Stocks

    Author:

    Ihor Dusaniwsky

    Managing Director of Predictive Analytics, S3 Partners

    Matthew Unterman

    Director of Predictive Analytics, S3 Partners

    July 18, 2022

    The recent rally off the June 16 lows (S&P 500 +5.36%, Nasdaq +7.57%, Russell 3000 +5.42%) has made some crowded shorts more squeezable. We have seen the number of highly squeezable stocks in our Squeeze metric since June 15more than double, and our average squeeze score has increased by over 250% (from 12.22 to 31.48). The Consumer Discretionary (primarily auto) and HealthCare (Biotech) sectors have the most constituents in the top 25 most squeezable stocks.

    US Stocks Most at Risk of a Short Squeeze (as of 07.18.22)

    Name

    Ticker

    Short Interest

    Crowded Score

    Squeeze Score

    FARADAY FUTURE INTELLIGENT ELECTRIC

    FFIE

    $ 188,608,729

    82.50

    100.00

    CANOO INC

    GOEV

    $ 132,517,741

    72.50

    100.00

    GOSSAMER BIO INC

    GOSS

    $ 133,305,452

    65.00

    100.00

    VERVE THERAPEUTICS INC

    VERV

    $ 224,050,733

    85.00

    100.00

    LIGHTWAVE LOGIC INC

    LWLG

    $ 176,621,188

    77.50

    100.00

    BEAM THERAPEUTICS INC

    BEAM

    $ 799,359,782

    85.00

    100.00

    COWEN GROUP INC

    COWN

    $ 185,216,634

    60.00

    100.00

    VERU INC

    VERU

    $ 385,291,057

    80.00

    100.00

    BEYOND MEAT INC

    BYND

    $ 843,960,565

    100.00

    100.00

    FATE THERAPEUTICS

    FATE

    $ 696,167,599

    82.50

    100.00

    ALLOGENE THERAPEUTICS INC

    ALLO

    $ 265,699,371

    72.50

    100.00

    SPRINGWORKS THERAPEUTICS

    SWTX

    $ 353,509,286

    82.50

    100.00

    MICROVISION INC

    MVIS

    $ 202,691,262

    95.00

    100.00

    LORDSTOWN MOTORS CORP

    RIDE

    $ 103,225,662

    85.00

    100.00

    MARATHON DIGITAL HLDGS INC

    MARA

    $ 260,457,593

    80.00

    100.00

    AMC ENTERTAINMENT

    AMC

    $ 1,496,227,678

    75.00

    100.00

    ERASCA INC

    ERAS

    $ 104,190,305

    85.00

    100.00

    ROCKET COMPANIES INC

    RKT

    $ 317,818,121

    92.50

    100.00

    DICK'S SPORTING GOODS

    DKS

    $ 1,383,137,838

    85.00

    100.00

    MICROSTRATEGY INC

    MSTR

    $ 796,410,236

    87.50

    100.00

    TELADOC HEALTH INC

    TDOC

    $ 1,475,749,811

    80.00

    100.00

    DUTCH BROS INC

    BROS

    $ 271,843,208

    85.00

    100.00

    FISKER INC

    FSR

    $ 460,646,555

    92.50

    100.00

    GAMESTOP CORP

    GME

    $ 1,917,400,083

    87.50

    100.00

    LUCID GROUP INC

    LCID

    $ 2,822,006,555

    100.00

    100.00

    Our Crowded Score takes a multi-factor approach to identify short-side crowded securities and take into consideration:

    • Total short dollars at risk

    • Short Interest as a true percentage of a company’s tradable float (which includes synthetic longs created by short selling).

    • Stock Loan liquidity

    • Trading liquidity

    While a stock can be “crowded” it might not necessarily be a short squeeze candidate. An additional variable which is necessary for a short squeeze to occur is substantial net-of-financing mark-to-market losses. A short position, no matter how crowded, that continues to be profitable cannot be squeezed. No trader will be forced to exit a position that continues to be profitable. They may exit or trim their positions if trading or stock loan liquidity diminishes significantly or if their expected Alpha is reached and there are more attractive trades elsewhere. But they will usually continue to “ride the wave” until the wave dissipates, or they are forced out by market conditions such as stock recalls or unpalatable stock borrow fees.

    The stocks in our top 25 list all have elevated S3 SI % Float and days-to-cover. Stock borrows are tight in most of these stocks with only six trading at General Collateral levels and twelve are trading at above 10% fee levels. And finally, all these stocks have incurred double digit percentage mark-to-market losses over the last 30 days coupled with mark-to-market losses over the last seven days.

    Having a high Squeeze Score does not guarantee that a stock will be squeezed – but it does highlight stocks that a have a much higher squeeze potential than most other stocks in the market. If a trader has significant historical profits in a stock; very high conviction in their investment\trading thesis; a technical or quantitative reason to be in a stock; or is very stubborn with a thick skin for enduring mark-to-market losses, they may remain short in a stock despite its high Crowded and Squeeze scores.

    But the chances of getting a tap on the shoulder from a Chief Risk Officer to cut losses and get out of the trade is higher for these stocks. The higher chance that short sellers may be forced to buy-to-cover will only help push stock prices even higher – and making the Squeeze even tighter for the shorts still in the stock.

    Related Articles