3 Short-Squeeze Stocks to Buy Before July for 20% Returns

  • Go contrarian on these short-squeeze stocks to buy.
  • AirSculpt Technologies (AIRS): AirSculpt could benefit from shifting social mores.
  • Beam Global (BEEM): Beam Global could potentially soar on the push for electrification.
  • Trupanion (TRUP): Trupanion bears don’t seem to appreciate Americans’ love for their pets.
Short-Squeeze Stocks to Buy - 3 Short-Squeeze Stocks to Buy Before July for 20% Returns

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Easily one of the most explosive ideas to consider in the market are short-squeeze stocks to buy. This niche area plays on the psychology of panicked emotions.

To initiate a short position, a speculator must first borrow shares from a broker. Following the acquisition, the trader immediately sells shares in the open market. The idea here is that the underlying enterprise may fall in value. Should it do so, the speculator can pick up shares for cheap, return them to the broker and pocket the difference as profit.

However, heavily shorted shares can also rise in value. If that happens, the pessimist may end up pocketing losses. Further, because a contractual obligation exists with the broker, the trader must acquire back the shares at a higher price. Getting out as early as possible in this scenario is key. Of course, when that happens, buying pressure drives up the target security.

It’s a risky practice because many if not most times, terrible enterprises continue to fall. However, the below ideas just might be the short-squeeze stocks to buy.

AirSculpt Technologies (AIRS)

woman smiling with white background
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Based in Miami Beach, Florida, AirSculpt Technologies (NASDAQ:AIRS) with its subsidiaries focuses on providing body contouring procedure services. Per its public profile, AirScult offers its namesake solution, which is a next-generation process that removes unwanted fat. It also tightens skin in a minimally invasive procedure. With social media promoting superficial mores, AIRS may have a massive total addressable market.

However, much of the market apparently doesn’t feel the same. According to data from Fintel, AIRS features a short interest of 18.26% of the float. That’s quite high, falling just under what would be considered extreme at 20%. However, speculators should also pay attention to the short-interest ratio. This metric jumps off the page at 58.06 days to cover.

That’s how many sessions it would take based on average trading volume for the bears to completely unwind their wagers. In other words, if the pessimists are caught out with AIRS stock, they could face serious problems.

It’s not unreasonable for shares to jump higher. For fiscal 2024, analysts are looking for earnings per share of 24 cents on sales of $209.71 million, an improvement over last year’s loss of 8 cents on sales of $195.92 million.

Beam Global (BEEM)

Photo of charging port on electric vehicle (EV) plugged into and being charged. EV Charging Stocks
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Based in San Diego, California, Beam Global (NASDAQ:BEEM) falls under the solar energy sector. Per its corporate profile, Beam is a clean-technology innovation firm. It engages in the design, development, engineering, manufacture and sales of renewably energized infrastructure products and battery solutions. One of its mainline products is the EV ARC, which stands for electric vehicle autonomous renewable charger.

Given the push for the electrification of mobility, BEEM should see significantly positive sentiment. However, the opposite appears to be true. Per Fintel, BEEM features a short interest of float of 13.59%. That’s quite elevated. However, what caught my attention was the short interest ratio of 35.39 days to cover. In my opinion, that’s awfully high considering the relevance of the business.

What also doesn’t make much sense is that analysts are forecasting significant improvements over the next few years. By the end of this year, the company’s loss per share could narrow to 81 cents (from $1.30). Further, sales may rise 17.6% to hit $79.2 million. And in fiscal 2025, the loss per share could slip again to 25 cents on revenue of $111.66 million.

Should these projections hold true, BEEM would probably rank among the short-squeeze stocks to buy.

Trupanion (TRUP)

a veterinarian holding a small white dog
Source: Shutterstock

Falling under the specialty insurance sector, Trupanion (NASDAQ:TRUP) is one of the more intriguing ideas among short-squeeze stocks to buy. Together with its subsidiaries, the company provides medical insurance for cats and dogs on a monthly subscription basis. It serves the U.S., Canada, continental Europe and Australia. Of course, TRUP stock makes sense because Americans love their pets.

As I explained last year in an interview with CGTN America, the inflation rate for pet-related expenditures is about twice that of “regular” goods and services. Even so, U.S. pet-owning households continue to support their four-legged friends. That’s an impressive dynamic because rising consumer prices have been such a headwind for other markets. Therefore, the pet-insurance business seems incredibly relevant.

Even so, Wall Street isn’t completely convinced. Short interest for TRUP reached 34.6% of its float. Further, the short interest ratio landed at 42.4 days to cover. However, it seems that speculators aren’t giving Trupanion a fair shake. For fiscal 2024, analysts anticipate a loss per share of 43 cents, an improvement over last year’s loss of $1.08.

Also, revenue may rise up to $1.26 billion, a 13.8% lift from 2023’s haul of $1.11 billion. It may be one of the more rational ideas for short-squeeze stocks to buy.

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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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