This article by Hamna Asim with my picture is in Yahoo Finance
In this post, we go through the top 15 short squeeze stocks to purchase right now. Check out 5 Best Short Squeeze Stocks to Buy Now for more stocks like this.
Retail trading activity in 2021 produced a record-breaking short squeeze that cost large capital market participants billions of dollars. GameStop Corp. (NYSE:GME) shares had a value of roughly $3 per share at the start of 2020. However, the short interest increased to 140% of the whole float of GameStop Corp. (NYSE:GME). This indicates that more shares than there were were shorted.
Retail traders were interested in it because they thought GameStop had remarkable potential for a short squeeze. When Ryan Cohen, co-founder of Chewy, bought almost 10% of GameStop Corp.’s (NYSE:GME) entire shares, investors on Reddit forums like really started to step up. At this point, GameStop stock started to soar dramatically. Even a year after the dramatic short squeeze, GameStop is still very well-liked by die-hard fans, and trade volumes are still quite high.
Melvin Capital, once regarded as one of the top hedge funds on Wall Street, was a significant short seller in the GameStop short squeeze. The hedge fund lost 53% in January 2021 despite starting the year with more than $12 billion in money. By May 2022, Melvin Capital was still reeling from significant losses from the previous year, and the firm made the decision to sell off its holdings and reimburse all investors for their money.
During short squeezes, investors stand to secure significant share price gains. Many investors become billionaires because to the short squeeze on GameStop Corp. (NYSE:GME). AMC Entertainment Holdings, Inc., Bed Bath & Beyond Inc., and Beyond Meat Inc. are a few of the top short squeeze stocks to purchase right now (NYSE:AMC).
Our Technique
Based on the opinion of retail investors, we combed the internet platform Reddit, namely subreddits like r/wallstreetbets and r/shortsqueeze, and chose the companies most likely to be engaged in a short squeeze shortly. The mood of hedge funds about the securities as of Q2 2022 was evaluated using information from the 895 funds that Insider Monkey monitors.
Best Stocks to Buy Right Now in a Short Squeeze 15. FingerMotion, Inc. (NASDAQ:FNGR)
Holders of Hedge Funds: N/A
As of September 14, short interest was 0.05%.
A New York-based mobile data specialist firm called FingerMotion, Inc. (NASDAQ:FNGR) offers mobile payment and recharge platform solutions in China. Data plans, subscription plans, mobile phones, and the use of loyalty points are only a few of the company’s goods and services. The business recently entered into partnerships with China Mobile and China Unicom. Additionally, patents guarantee that competitive forces are moderated.
One of the finest short squeeze stocks to buy right now is FingerMotion, Inc. (NASDAQ:FNGR), along with Beyond Meat, Inc. (NASDAQ:BYND), Bed Bath & Beyond Inc. (NASDAQ:BBBY), and AMC Entertainment Holdings, Inc. (NYSE:AMC).
fourteen. Camber Energy, Inc. (NYSE:CEI)
Holders of Hedge Funds: 2
As of September 14, there was 6.53% short interest.
In Kansas, Missouri, Louisiana, and Texas, Camber Energy, Inc. (NYSE:CEI), an independent oil and gas business, searches for and sells crude oil, natural gas, and natural gas liquids. Redditors have recently been enthusiastic about starting a short squeeze on Camber Energy, Inc. (NYSE:CEI), which as of September 14 had accumulated 6.53% short interest. As of October 5, the stock has lost nearly 76% of its value so far this year.
In Camber Energy, Inc. (NYSE:CEI), 2 hedge funds owned holdings worth $295,000, according to Insider Monkey’s second quarter database, compared to 5 funds with interests totaling $496,000.
ContextLogic Inc. 13. (NASDAQ:WISH)
Holders of Hedge Funds: 13
A short interest rate of 8.96% as of September 14
San Francisco, California serves as the corporate headquarters for ContextLogic Inc. (NASDAQ:WISH), a 2010 incorporation. It is a mobile e-commerce business with operations throughout the globe in North America, South America, and Europe. As of October 5, ContextLogic Inc. (NASDAQ:WISH) stock had fallen roughly 75% year to date, and short sellers were also keeping an eye on it. ContextLogic Inc. (NASDAQ:WISH), which has recently attracted a lot of Redditors’ attention, is one of the greatest short squeeze stocks to purchase right now.
ContextLogic Inc. (NASDAQ:WISH) reported Q2 revenue that fell short of expectations on August 10, prompting Credit Suisse analyst Stephen Ju to drop his price objective for the firm from $7.60 to $7.20 while maintaining an Outperform rating. The analyst said that ContextLogic Inc. (NASDAQ:WISH) continued to implement its turnaround strategy as the “most meaningful takeaway” from the Q2 results. He predicted that Q3 free cash flow “will mark the trough” and increase in 2023.
13 hedge funds were positive on ContextLogic Inc. (NASDAQ:WISH) at the end of June 2022, down from 19 firms the previous quarter, according to Insider Monkey data. The largest stake in the firm is held by Maple Rock Capital, which has 13.5 million shares worth $21.6 million.
42 hedge funds are shareholders in Paramount Global (NASDAQ:PARA), according to 12.
As of September 14, there was an 11.38% short interest.
Paramount Global (NASDAQ:PARA), a media and entertainment firm that operates via sectors including TV Media, Direct-to-Consumer, and Filmed Entertainment, comes next on our list of the top short squeeze stocks to buy. According to prior years, the corporation issued a $0.24 per share quarterly dividend on September 21. For stockholders with records as of December 15, the dividend is due on January 3, 2023. On October 5, the dividend yield was roughly 5%.
On October 4, Wells Fargo analyst Steven Cahall lowered his rating on Paramount Global (NASDAQ:PARA) from Overweight to Equal Weight and lowered his price objective from $40 to $19. The analyst, who was previously positive about the content and streaming strategy of Paramount Global (NASDAQ:PARA), is now “increasingly anxious” about the linear ecosystem across all media.
42 hedge funds were long Paramount Global (NASDAQ:PARA) at the end of the second quarter, up from 40 firms at the end of the first. The largest shareholder in the business is Warren Buffett’s Berkshire Hathaway, which owns 78.4 million shares worth around $2 billion.
One-Eleven Dynavax Technologies Corporation (NASDAQ:DVAX)
Holders of Hedge Funds: 18
15.82% as of September 14th for short interest
The biopharmaceutical business Dynavax Technologies Corporation (NASDAQ:DVAX), with its main office in Emeryville, California, focuses on creating and marketing new vaccines in the US. On August 4, Dynavax Technologies Corporation (NASDAQ:DVAX) increased the sales forecast for 2022 for CpG 1018, the company’s main product and vaccine adjuvant. One of the top stocks to purchase right now is Dynavax Technologies Corporation (NASDAQ:DVAX), which is a short squeeze stock.
With an Outperform rating and a $22 price target, JMP Securities analyst Roy Buchanan started covering Dynavax Technologies Corporation (NASDAQ:DVAX) on September 27. The cornerstone of the company’s developing pipeline is Dynavax Technologies Corporation’s (NASDAQ:DVAX) adjuvant technology, which is verified by a “best-in-class approved vaccine,” the analyst informed investors in a research note. The “less-risky” future revenue flows from Dynavax Technologies Corporation’s (NASDAQ:DVAX) authorized, market-leading, Hepatitis B prophylactic vaccine are what drive his stock value.
At the end of Q2 2022, 18 hedge funds were positive on Dynavax Technologies Corporation (NASDAQ:DVAX), down from 22 firms the previous quarter, according to Insider Monkey data. Fisher Asset Management, run by Ken Fisher, has 4.3 million shares in the firm, valued at $54 million.
The company American Virtual Cloud Technologies, Inc. (NASDAQ:AVCT)
Holders of Hedge Funds: 5
As of September 14, there was 11.54% short interest.
American Virtual Cloud Technologies, Inc. (NASDAQ:AVCT), a pure-play cloud communications and collaboration firm with headquarters in Georgia, provides businesses all over the globe with a real-time communications platform. In order to market diverse solutions, American Virtual Cloud Technologies, Inc. (NASDAQ:AVCT) also has strategic alliances with AT&T, IBM, and Etisalat. One of the finest short squeeze stocks to buy right now is American Virtual Cloud Technologies, Inc. (NASDAQ:AVCT), which had a shorted float as of September 14 that was over 11.5% and Redditors have recently been optimistic on the company.
On September 30, American Virtual Cloud Technologies, Inc. (NASDAQ:AVCT) declared its intention to split its issued and outstanding shares of common stock in a 1-for-15 reverse stock split. The Company’s Common Stock commenced trading on a split-adjusted basis on October 3, 2022, with the opening of the market.
With 398,797 shares worth $100,000, Marshall Wace LLP, run by Paul Marshall and Ian Wace, is the largest shareholder in American Virtual Cloud Technologies, Inc. (NASDAQ:AVCT) among the hedge funds monitored by Insider Monkey. At the end of June 2022, there were 5 hedge funds that were overall long American Virtual Cloud Technologies, Inc. (NASDAQ:AVCT), up from 4 firms during the previous quarter.
Gamstop Corporation 9. (NYSE:GME)
Holders of Hedge Funds: 17
As of September 14, there was 18.51% short interest.
The Texas-based retailer of games and entertainment goods is called GameStop Corp. (NYSE:GME). On September 7, the business announced a non-GAAP loss per share for the second quarter of $0.35, surpassing market expectations by $0.06. The $1.14 billion in sales decreased 3.4% from the prior year, below Wall Street projections by $130 million. The 2021 short squeeze of GameStop Corp. (NYSE:GME) garnered media attention, and retail investors are still supporting the company despite the fact that valuation does not correspond to underlying fundamentals. It is among the top short squeeze stocks to purchase right now.
On July 22, Wedbush analyst Michael Pachter restated an Underperform rating on GameStop Corp. (NYSE:GME) while lowering the price target from $30 to $7.50. The stock of GameStop Corp. (NYSE:GME) is still trading at levels that don’t seem to be in line with the company’s fundamentals, and the company’s turnaround strategy hasn’t worked out so far, the analyst informed investors in a research note.
At the end of the second quarter of 2022, 17 of the hedge funds monitored by Insider Monkey were long GameStop Corp. (NYSE:GME), down from 18 funds the previous quarter. A prominent shareholder in the firm is Mason Capital Management, which has 518,445 shares worth about $19 million.
In their investor letter for Q2 2022, Bireme Capital expressly mentioned GameStop Corp. (NYSE:GME) as follows:
Unbelievably, GameStop Corp. (NYSE:GME) is the only one of our short holdings that will be stable in 2022. The stock now has a market valuation of $11.5 billion, which is much more than its pre-pandemic high. This is despite the fact that sales is 30% lower than it was at its height, gross margins have shrunk by 1500 bps, and the business has lost $700 million in free cash over the last four quarters (we had to double check that number because it is so high).
Wall Street’s forecasts of Gamestop’s profitability have been constantly lowered down, which makes the company’s stock price stability in 2022 all the more puzzling. Analysts’ current estimate of an EBITDA loss is roughly $400m, which is much greater than their forecast of a loss of $60m as of February 3, 22. Their newly introduced NFT marketplace, which came out approximately a year too late to be effective in the NFT industry, will do little to improve their core business. Instead, we view this as another instance of a meme stock firm trying to copy its way into a different business model by relying on the stock’s popularity to fuel new business lines. The $11.5 billion market valuation, in our opinion, vastly overestimates Gamestop’s capacity to change course and become more profitable. We don’t think Gamestop will ever post a GAAP profit again.
The company AMC Entertainment Holdings, Inc. (NYSE:AMC)
Holders of Hedge Funds: 18
As of September 14, there was 19.39% short interest.
Theaters in the US and Europe are owned and run by AMC Entertainment Holdings, Inc. (NYSE:AMC). Hedge funds heavily shorted AMC Entertainment Holdings, Inc. (NYSE:AMC) and GameStop in 2021. Redditors are still eager to start a short squeeze and remain optimistic about AMC Entertainment Holdings, Inc. (NYSE:AMC).
On August 23, Wedbush analyst Michael Pachter maintained an Underperform rating on AMC Entertainment Holdings, Inc. (NYSE:AMCstock )’s while lowering the price objective from $4 to $2. The expert highlighted that while theatrical exhibition is beginning to normalize, there have been significant production delays over the last year and the amount of material has not yet recovered to pre-pandemic levels. The analyst reduced his price estimate to $2 after updating his model to account for the additional shares since AMC Preferred Equity started trading on August 22.
At the end of Q2 2022, 18 hedge funds were positive on AMC Entertainment Holdings, Inc. (NYSE:AMC), up from 16 firms the previous quarter, according to Insider Monkey data. With 2.8 million shares worth $38.2 million, Israel Englander’s Millennium Management is the business with the greatest stake.
The company Blue Apron Holdings, Inc. (NYSE:APRN)
11 holders of hedge funds.
As of September 14, there was a 28.20% short interest.
The New York-based business Blue Apron Holdings, Inc. (NYSE:APRN) runs a direct-to-consumer platform that distributes innovative recipes made using seasonal and fresh ingredients. On October 3, the share price of Blue Apron Holdings, Inc. (NYSE:APRN), which had previously guided Q3 sales substantially below Street expectations and with going concern issues, fell as much as 46.5%. As of September 14, there was a short interest of more than 28%. It is among the top short squeeze stocks to purchase right now.
Blue Apron Holdings, Inc. (NYSE:APRN) was the subject of new research by Lake Street analyst Ryan Meyers on August 10 with a Buy rating and a $9 price target. He thinks the adjustments Blue Apron Holdings, Inc. (NYSE:APRN) has made since hiring CEO Linda Findley in 2019 have strengthened its position in the market and enabled sustainable growth.
11 hedge funds were positive on Blue Apron Holdings, Inc. (NYSE:APRN), according to Insider Monkey’s Q2 2022 database, down from 14 funds in the previous quarter. With 612,092 shares worth $2.2 million, Wexford Capital, owned by Charles Davidson, is the company’s biggest stakeholder.
Revlon, Inc. 6. (NYSE:REV)
Holders of Hedge Funds: 14
As of September 14, there was 28.13% short interest.
A New York-based firm called Revlon, Inc. (NYSE:REV) manufactures, distributes, and retails cosmetics and personal care items all over the globe. After filing for Chapter 11 bankruptcy in mid-June, Revlon, Inc. (NYSE:REV) began to conduct a thorough financial restructuring of its historical capital structure in August with the goal of enhancing its long-term outlook. One of the finest short squeeze stocks to purchase right now is Revlon, Inc. (NYSE:REV).
At the end of the second quarter of 2022, 14 hedge funds were long Revlon, Inc. (NYSE:REV), compared to 36 funds the previous quarter, according to Insider Monkey’s data. Marshall Wace LLP, owned by Paul Marshall and Ian Wace, have a large stake in the business, holding 301,758 shares worth $1.6 million.
Retail investors are pouring money into Revlon, Inc. (NYSE:REV) as short interest rises, joining other companies including Beyond Meat, Inc. (NASDAQ:BYND), Bed Bath & Beyond Inc. (NASDAQ:BBBY), and AMC Entertainment Holdings, Inc. (NYSE:AMC).
In their investor letter for Q2 2022, Mittleman Brothers said the following for Revlon, Inc. (NYSE:REV):
Last but not least, MIM has previously spoken on the June 15 bankruptcy filing by Revlon, Inc. (NYSE:REV); if you missed it, go here. MIM’s position remains the same: Bankruptcy of Revlon
Considering Chris’ reduced estimate of fair value is $10, Revlon has since traded up from the pre-bankruptcy filing low of $1.08 on June 13 to above $9.00 on a few occasions, most recently on June 22 and August 1. During those two trading sessions, MIM sold a significant portion of its position at just over $9.00/share (down from the mid-20s). By only using the range of current market multiples, the realization might be far more than $10 per share if the bankruptcy procedure resulted in an auction of the assets. However, bankruptcy involves large expenses, uncertainties, and dangers that might muddle what is fair, therefore it makes sense to reduce the weighting into these cyclical price surges.
According to Chris’ calculations, MIM still believes there are many purchasers for these assets who are willing to pay the 2x sales and 14x EBITDA multiples required for the stock to regain around $10 per share in value. The share price at 15x EBITDA would be about $16. $22 would equal 16x. Additionally, there are a few surprising new customers.