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Mon. 8 Aug 2022, 11:47am ET Benzinga News, Penny Stocks, Small Cap, Trading Ideas

Potential short squeeze plays gained steam in 2021 and continued through 2022, with new traders looking for the next huge move.

A short squeeze can occur when a heavily shorted stock rises in value instead of falling. Short sellers could be looking to close out their position and can face a loss if they have to buy back the shares they initially borrowed at a higher price.

A squeeze can occur when short sellers are forced into buying to cover their position, which can cause shares to move up on many occasions.

Fintel Data, which requires a subscription, provides a look at several of the top shorted stocks and how likely a short squeeze is to occur. Here’s a look at the top five short squeeze candidates for the week of Aug. 8.

ToughBuilt Industries: Home improvement and construction product company ToughBuilt Industries Inc. (NASDAQ:TBLT) topped the short squeeze leaderboard for the third straight week. Data shows 34.1% of the float short, up from the previous week’s 30% figure. The cost to borrow on shares is 686.8%, up from last week’s 226.1% and one of the highest on record.

Redbox Entertainment: Streaming company Redbox Entertainment (NASDAQ:RDBX) is no stranger to the short squeeze leaderboard. After several weeks out of the top ten, but a mention in last week’s stocks to watch, the company moves up 15 places to second place on the short squeeze leaderboard. Data shows 63.7% of the float short, in line with last week’s figure. The cost to borrow on hares is 660.9%, one of the highest figures on record. The inclusion of Redbox comes as the company is getting acquired by Chicken Soup for the Soul Entertainment in a deal that values shares at 94 cents at the time of writing versus a current share price of $4.76.

Revlon Inc.: Cosmetics company Revlon Inc. (NYSE:REV) has been a popular stock for retail traders after fighting off bankruptcy for now. The stock moves up 22 positions back into the top five short squeeze candidates. Data shows 60.1% of the float short and a cost to borrow of 315.1%.

TDH Holdings: Pet food company TDH Holdings Inc (NASDAQ:PETZ) ranks fourth for the week on the short squeeze leaderboard. Data shows 37.6% of the float short and a cost to borrow of 60.6%.

See Also: 5 Short Squeeze Stocks That May Soar: ToughBuilt, Solo Brands And This Oil Stock

Hour Loop Inc: E-commerce company Hour Loop Inc (NASDAQ:HOUR) moves down the leaderboard three positions to fifth place. The stock has been in the top five for several consecutive weeks. Data shows 21.1% of the company’s float short, in line with last week. The cost to borrow on shares of Hour Loop is 59.2%, higher than each of the last two weeks.

Stocks To Watch

Outside the top five companies on the short squeeze leaderboard are several companies making big moves up and down that could be the next top squeeze candidates. Here's a look at five stocks to watch:

Biopharmaceutical company Greenwich Lifesciences (NASDAQ:GLSI) moves up 16 places to rank sixth and just outside the top five candidates on the leaderboard. Shares are flat over the last month. Data shows 47.1% of the float short and a cost to borrow of 11.4%.

Financial products company CompoSecure (NASDAQ:CMPO) ranked seventh for the week, down one position. Data shows 41.2% of the float short and a cost to borrow of 10.8%.

Financial services company Greenpro Capital Corp (NASDAQ:GRNQ) has one of the biggest moves for the week, jumping up 2,021 positions to rank ninth on the list. Data shows 17.3% of the float short and a cost to borrow of 27.5%.

Streaming company Chicken Soup for the Soul Entertainment (NASDAQ:CSSE) ranked tenth for the week, two weeks after ranking in the top five. Data shows 20.3% of the float short and a cost to borrow of 37.1%.

Outdoor cooking company Weber Inc. (NYSE:WEBR) has been a former stock in the top five and is nearing a return to the top of the leaderboard. The company moved up 31 places to 13th place. Data shows 54.2% of the float short and a cost to borrow of 39.3%.