Trading Idea: 4 Stocks That Could Yield Quick Profits
With the markets back in full-swing after the lackadaisical holiday period, where can short-term traders look for some quick profits? A simple scan yielded 4 small-cap stocks that have short interest over 25% and are trading within 10% of new 52-week highs. If these names can continue to push up towards new highs, it could unleash a wave of short-covering, driving prices higher in a hurry. Below, Benzinga outlines these four names which could benefit from nervous short-sellers.
Colfax Corporation (NYSE:CFX) - This industrial products stock has been running higher over the last 3 months, rising almost 36%. On Friday, the name has been active once again, adding 3% on heavier than usual volume. Shares are currently trading at $29.56 which compares to a 52-week high of $32.69. Short-sellers have been targeting the name, and with around one third of the float sold short, a squeeze could develop as CFX continues to move higher. Friday's volume numbers suggest that activity in the stock is picking up. Around 700,000 CFX shares have already traded hands compared to a 3-month daily average of 567,500.
Ebix (NASDAQ: EBIX) - This is a stock which has been a very solid long-term performer, rising a whopping 670% over the last five years. Over the last year, however, shares have lost 9.81% to $22.28, but have been rallying over the last few months, notching a gain of 50%. If this trend continues it could trigger more short-covering, sending prices up in short order. Last month, short interest in EBIX was above 32%.
Liz Claiborne (NYSE: LIZ) - This retail stock is very close to taking out its 52-week high. The shares trade at $9.51 and the 52-week high is at $9.73. It also happens to have a very high short interest with around 29% of its float sold short as of last month. LIZ shares have more than doubled in just the last 3 months, and have recently broken out of a consolidation pattern. This name may be ready to run higher in the coming weeks as short sellers rush to cover their wrong-way bets.
Sonic Automotive (NYSE: SAH) - Shares currently trade at $14.83 versus a 52-week high of $16.27. The stock is sitting at the top of a trading range which goes all the way back to the Summer of 2009. If SAH can break out of this range, expect the stock to move higher very quickly as short-sellers rush to buy back shares at the same time that breakout traders jump in on the long side. Around 26% of SAH's float was sold short as of last month.
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