A Few Short Squeezes To Consider (TSLA, NILE, BBBB)

High short positions in companies can worry investors, as it is usually the sign of a problem with the fundamental aspect of the company. When you see short ratios north of 20%, it should raise a red flag. On the flip side of things, if you see a company with a high short ratio, it might be worth looking a little deeper into the company. Perhaps it's misunderstood. Perhaps it had a problem in the past that it has put behind it , but the market hasn't recognized it yet. Short squeeze stocks can have powerful, explosive moves when positive news comes out, such as earnings and this can be a source of returns for your portfolio. Blackboard Inc.

is one such stock with a high short interest, with a 27.5 short to cover ratio. This means it would take 27.5 days worth of normal volume for shorts to cover. The education software maker reported better than expected earnings on Wednesday, and the market was positive on it, sending shares up 2%. If the company had raised guidance or provided some kind of stronger outlook, shares probably would've risen a lot more. Tesla Motors Inc

is another stock with a high short interest, as around half of the company's float is sold short. The maker of electric cars isn't profitable yet, but Panasonic

just invested $30 million in the company, on top of investments from Daimler

and Toyota

. The stock rose 9% yesterday on the Panasonic news, highlighting the short squeeze. These companies are seeing something the market is not. It's not profitable yet, but electric cars are the future, if we ever want to wean ourselves off oil. Rome wasn't built in a day, remember that. The last short squeeze play to consider is Blue Nile, Inc.

. The company reported better than expected earnings yesterday, and shares are up sharply this morning, due in large part to the short squeeze. It's a little too richly valued for my taste, at 43 times forward earnings, which may be the reason for the high short interest. If you can find company's that have reasonable valuations, high short interests, and are in strong sectors, these companies are worth an addition to your portfolio. Just look at shares of Coinstar

. Disclosure: no positions in companies mentioned