At the heart of every idea for short-squeeze stocks to buy is the ability to make a massive amount of money in a short time period. For a quick recap, those attempting to spark a gamma squeeze essentially take the opposite side of the bearish bet. Theoretically, though, no upside ceiling exists for publicly traded securities, meaning that if short traders get it wrong, they could face unlimited liability.
To avoid such a proposition bears that recognize when a short trade is about to go awry exit their positions. For the shorts, exiting means buying back the borrowed shares to initiate the “negative” trade, which is bullish for the underlying security. Therefore, stocks for gamma squeeze represent one of the most powerful emotional triggers in the market: the inherent sense of self-preservation.
However, deliberately going against the bears carries risks for bullish speculators as well. If you’re merely buying junk securities because most folks are betting against them, you could end up getting steamrolled. Instead, the best short-squeeze stocks offer some rational reason to support the underlying business. With that, below are compelling ideas for potential gamma squeeze stocks for the extreme speculator.
| AINC | Ashford | $10.42 |
| BTAI | BioXcel Therapeutics | $21.50 |
| ARAV | Aravive | $1.57 |
Ashford (AINC)
Based in Dallas, Texas, Ashford (NYSEAMERICAN:AINC) is a leading provider of asset management and other services to companies primarily within the hospitality industry. Last month, the company released its earnings results for the first quarter. In it, Ashford posted revenue of $80.9 million, up 35% on a year-over-year basis. Unfortunately, the market hasn’t been impressed overall, with shares down nearly 18% since the Jan. opener.
To be sure, AINC ranks among the most shorted securities, according to Benzinga. At the time of writing, AINC’s short interest stands at 67.47% of its float. Also, its short-interest ratio is 3.5 days to cover. Despite the poor print, AINC could be one of the short-squeeze stocks to buy.
Although Ashford features some rough metrics, it does well operationally. On a per-share basis, its three-year revenue growth rate clocks in at 25.5%, beating out 76.48% of its peers. Also, its EBITDA growth rate impresses at 39.2%, above 75.38%. Finally, covering analysts peg AINC as a consensus moderate buy. Their average price target lands at $17, implying over 57% upside potential. Thus, it’s one of the stocks for gamma squeeze.
Bioxcel Therapeutics (BTAI)
Headquartered in New Haven, Connecticut, Bioxcel Therapeutics (NASDAQ:BTAI) might not seem that impressive of an enterprise at first glance. Since the beginning of this year, BTAI slipped almost 1%. However, over the past 365 days, shares gained nearly 116% of equity value. Nevertheless, the bears have eyes on BTAI.
Per Benzinga, BTAI’s short interest is 50.17% of its float. Also, its short-interest ratio comes in at 6.5 days to cover. Despite the pessimistic targeting, BTAI could rank among the short-squeeze stocks to buy. Fundamentally, the company specializes in developing transformative medicines in neuroscience and immune oncology through the use of artificial intelligence. According to data compiled by Statista, the global healthcare AI market could be worth almost $188 billion by 2030.
To be fair, BTAI represents one of the riskiest ideas among high-volatility stocks. In terms of both operations and fiscal stability, Bioxcel suffers from poor metrics. However, the underlying science could be enticing enough for bulls to take a shot. Notably, Wall Street analysts peg BTAI as a strong buy with a $48.50 average price target. This forecast implies upside of 128%. Thus, BTAI could be one of the best short-squeeze stocks.
Aravive (ARAV)
Hailing from Houston, Texas, Aravive (NASDAQ:ARAV) focuses on developing transformative targeted cancer therapeutics. According to its website, the company is currently conducting clinical trials of batiraxcept in combination with standard anticancer treatments in multiple indications. Thanks to its scientific and medical relevancies, the market seems to appreciate ARAV despite its speculative profile. Since the start of the year, shares gained over 22% of equity value.
Nevertheless, the biotechnology firm continues to attract heavy attention from doubters. Per Benzinga, ARAV’s short interest is 97.88% of its float, which is quite extreme. Also, its short interest ratio clocks in at 17.2 days, another elevated metric. Still, ARAV could be an enticing opportunity for short-squeeze stocks to buy (at least for speculators).
Overall, it’s difficult to deny that Aravive suffers from less-than-desirable financial metrics. With a shaky balance sheet and a very long pathway toward profitability, the bears have justification for their pessimism. At the same time, the company has consistently grown its top line since 2018. On a closing note, analysts peg ARAV as a unanimous strong buy. Their average price target hits $11.33, implying slightly over 617% upside potential.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
