Short Squeeze Stock Candidates (NASDAQ:VRA),(NYSE:B),(NYSE:ONE)

Today’s short squeeze candidates include Vera Bradley, Barnes Group, and Higher One Holdings (NASDAQ:VRA),(NYSE:B),(NYSE:ONE).

Face it, if a stock is in high demand then its price will appreciate...  Simple supply and demand economics.  So, enter the Short Squeeze.  What happens during a short squeeze is that many traders will have shorted a stock.  The stock price will drop as expected by the short sellers, but at some point those short seller will need to take their profit.  So, they begin buying the stock back to cover their short position.  As they begin buying the stock back, the stock prices starts to jump upwards instead of continuing down.  This will entice other traders that have shorted the stock to read the buying signal and start covering their own short positions.  Soon, everyone that has shorted the position will want to exit by purchasing shares, creating a sudden demand for the stocks and resulting in the stock price going up.  The more shorts there are, the more buying that needs to occur to close the short positions.  In essence, the shorts will be squeezed into buying the stock to create the demand!

Shares of Vera Bradley have seen a strong increase in in short interest in the past month of 40.2%.  Short interest is often measured by the number of days to cover, or the number of days at average daily volume it would take for the short sellers to buy all the short positions back.  The number of days to cover for Vera Bradley is 14.2 days, thereby meaning that at the average daily volume of 703,000 it would take 14.2 days of trading to buy back all the shorted stock.  The percent of the stock held by institutional investors is 59.9%, so the stock has some heavy interest with the big boys on Wall Street.  The current price to earnings growth (PEG) ratio is 1.32, which a value less than 1.5 indicates the stock is trading at reasonable price and less than 1.0 usually indicates it is trading at a discount to its growth rate.  Plus, Vera Bradley is no slouch at making money with its 12-month revenue checking in at 406 million.  Currently, shares of VRA last checked in at $44.36 with the 52-week range of $24.83 to $52.36.

Barnes Group has seen its shares bounce between $17.47 and $25.85 in the last 52 weeks, with the shares last finishing at $24.51.  Barnes Group has 10.8 days to cover for the shorts based on an average daily volume of 465,400.  The short interest in the stock increased last month by 37%.  Institutional investors hold a solid 90.1% of the shares outstanding and the PEG ratio is 0.51 indicating the stock may have some value there (again, 1.5 or less is good and less than 1.0 indicates the stock may b e trading at a discount to growth rate).  Additionally, Barnes Group has strong revenues with $1,220M indicating it may have some financial stability.  The stock currently trades with an EPS of 1.22, and is a candidate for a short squeeze.

Higher One Holdings is our final candidate for discussion of a short squeeze.  In terms of the squeeze ranking, traders have shorted the stock such that there has been a 39.5% increase in short interest with 32.4 trading days to cover based on average volume of 407,900.  The PEG ratio for the company is 1.09 to indicate some value in share price.  The sales revenue for Higher One Holdings checks in at $167M.  With the stock price currently trading at $17.90 and the big institutional investors holding 76.7% of the outstanding shares, this stock is likewise a short squeeze candidate.  The stock shares currently trade at an EPS of 0.52 and have fluctuated between $13.49 and $21.97 over the last 52 weeks.

And there you have it, three stock candidates that could explode with a short squeeze.  If any of these stocks’ prices catch some traction, there could be a buying frenzy by those shorts as they cover their positions.  Good luck investors!