Stocks with the highest short interest can make you a lot of money.
Indeed, shorting stocks can be risky, though. After all, if you don’t play it right, you can actually lose more than your initial investment. As opposed to just buying a stock. Where, even in the worst case scenario, it’s unlikely you’ll lose your entire investment.
But if you do play it right, you can also make mountains of cash. And in a very short amount of time. That, dear reader, is the allure: fast cash!
The key, of course, is knowing how to limit your risk by doing your proper due diligence.
The good folks over at Charles Schwab did a great job summarizing three types of analysis that are integral to identifying the perfect short target.
- Fundamental analysis: Analyzing a company’s financials can help you decide if its stock may be a candidate for a decline in price. For example, when looking for short-sale candidates, some traders look for companies whose earnings per share (EPS) and sales growth have been slowing. This, in the expectation that the company’s share price will follow suit.
- Technical analysis: Patterns in a stock’s price movement can also help you decide if it could be on the cusp of a downtrend. One potential signal could be when a stock has fallen through a series of lower lows while trading at higher volumes. Another could be when a stock has rebounded to the upper range of its trading pattern but appears to be losing steam.
- Thematic: This approach involves betting against companies whose business models or technologies are deemed outdated (think Blockbuster Video), which can be more of a long game but can pay off should your prediction prove correct.
To be sure, integrating all three analyses can certainly help you identify the perfect short while limiting your risk. It’s also a good idea to just find the stocks that have the highest short interest. Those are typically the stocks that have been well-vetted by seasoned short sellers.
7 Stocks With The Highest Short Interest
I suppose the word “highest” is subjective. But for our purposes, we’re looking at stocks with a short interest in excess of 30%.
These include, but are not limited to…
- Riley Financial (NASDAQ: RILY)
- Biomea Fusion (NASDAQ: BMEA)
- Cutera, Inc. (NASDAQ: CUTR)
- Immunity Bio. (NASDAQ: IBRX)
- Beyond Meat (NASDAQ: BYND)
- Upstart Holdings (NASDAQ: UPST)
- Medical Properties Trust (NYSE: MPW)
Of course, the stocks with the highest short interest change constantly. So if you’re looking to score some serious cash by shorting stocks, you can’t take your eye off the ball. Particularly if you’re trying to limit your risk. This is not a “set it and forget it” situation.
For some investors, this is no problem. Especially for those who can take on more risk than your average investor. But if you’re not in a position to take on considerable risk while constantly monitoring your short positions, looking for stocks with the highest short interest may not be right for you.
That doesn’t mean you still can’t make a boatload of cash in a short amount of time. In fact, I would argue that some stocks offer considerably more upside than even the most attractive short targets.
Like this new energy play that Sam Altman, Bill Gates and Elon Musk have already invested $3 billion in.
I don’t know about you, but I’m far more likely to invest in a company that these three billionaires have already invested in than I am to take a huge risk by shorting some random stock.
Although I should point out that this energy play is not your typical energy play. It’s actually designed specifically to support the rapid growth of the AI market. A market, by the way, that turned Nvidia (NASDAQ: NVDA) into a $2.3 trillion juggernaut.
It is a bit of a niche play. But if Elon Musk, Bill Gates and Sam Altman are in for billions, I’m wetting my beak on this one, as well. And you should, too.
Which is why I’m including a link to this special report that explains exactly why three of the richest men in the world have already ponied up small fortunes to get a piece of this thing. And more importantly, how you can get some of this action for yourself, right now. To a new way of life and a new generation of wealth… Jeff Siegel
@JeffSiegel on Twitter
Check us out on YouTube!Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.
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