Under most financial guidance frameworks, experts advise a long-term approach, which is exactly the opposite ethos when it comes to speculative ideas for high potential stocks. Here, the emphasis centers on getting in, scalping a quick profit and getting out to advantage the next opportunity.
To better determine stocks ready to soar, I primarily looked at Fintel’s Short Squeeze Leaderboard. But rather than relying on its proprietary rankings, I decided to look at the combination of short interest (as a percentage of float) and short interest ratios. In baseball terms, this is the equivalent of seeking opportunities based on a hitter’s count and runners in scoring position.
Along with this important framework, I considered other factors such as hedge fund exposure and analyst ratings. I don’t want to throw a bunch of random ideas; instead, these are enterprises I can get behind myself. With that, below are high potential stocks to consider.
Westrock Coffee (WEST)
A small-capitalization firm, Westrock Coffee (NASDAQ:WEST) focuses on building and operating the preeminent integrated coffee, tea and extracts supply chain. It also seeks to be the most competitive provider of beverage solutions to the most distinguished brands. To be sure, it’s one of the riskiest high potential stocks, losing about 27% in the trailing one-year period.
At the same time, it could be one of the stocks ready to soar. Fundamentally, the global coffee market size will likely hit $132.13 billion by year’s end. And by 2029, the segment could land at $166.39 billion, a compound annual growth rate of 4.72%. That might be an underestimate based on China’s rising coffee demand.
Interestingly, though, WEST is one of the most-shorted securities. Its short interest as a percentage of float is 19.13%, while its short interest ratio stands at 31.83 days to cover. That means short traders will need nearly 32 sessions to fully cover their bearish positions.
That’s a risky proposition given that hedge funds have increased their holdings of WEST since the second quarter of 2022. Also, analysts rate shares a consensus moderate buy with an $11.50 price target.
Trupanion (TRUP)
A pet insurance provider, Trupanion (NASDAQ:TRUP) offers and administers cat and dog insurance. While the industry might seem overkill for non-pet-owning households, the reality is that Americans love their four-legged family members. Indeed, total U.S. pet industry sales continues to rise despite the presence of significant economic headwinds. Just on that note, TRUP appears a candidate for high potential stocks.
Nevertheless, Trupanion also symbolizes an incredibly volatile idea. In the past 52 weeks, TRUP lost more than 40% of equity value. As I explained in my interview with CGTN America, the headwinds of stubborn inflation and rising borrowing costs caught up to pet owners. Sadly, many are trying to cut corners wherever they can to make ends meet for everyone in the household (humans and animals alike).
Understandably, then, TRUP’s short interest soared to 39.74% of its float. As well, the short interest ratio clocked in at 22.57 days to cover. While ominous looking, it’s also interesting that hedge funds have been consistently raising their exposure to Trupanion shares since Q4 2022.
Lastly, analysts peg shares a moderate buy with a $37.67 price target. In my opinion, it’s one of the stocks ready to soar.
ORIC Pharmaceuticals (ORIC)
Based in South San Francisco, ORIC Pharmaceuticals (NASDAQ:ORIC) specializes in oncology. Per its website, ORIC seeks to discover, develop, and commercialize innovative therapies that address cancer resistance. This directive includes making existing therapies work better and for longer. It’s a compelling idea, with shares gaining nearly 47% of equity value in the trailing one-year period.
However, if you think that you’re getting in too late, consider that since its public market debut in April 2020, ORIC fell 68%. Nevertheless, since November of 2022, shares have been steadily rising, enticing bullish speculators to take a position. Indeed, that’s exactly what hedge funds are doing. From Q2 of last year to Q3, hedge fund exposure to ORIC jumped over 14%.
Even with this powerful signal, the bears are actively shorting ORIC. Per Fintel, its short interest is 25.62% of float while its short interest ratio skyrocketed to 53.13 days to cover. The latter statistic is simply ridiculous.
Oh yeah, analysts rate shares a unanimous strong buy with a $16.67 price target. It’s easily one of the high potential stocks.
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.
