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| Stock | Price | 52 Week Range | Marketcap | EPS | Dividend Yield | Chart (24H) | Sector | Employees | Last Updated |
|---|---|---|---|---|---|---|---|---|---|
 VeriSign, Inc. VRSN | $271.42 | 25.35B | 8.39 | 1.13% | Technology | 929 | 12 hours ago | ||
 CarMax Inc KMX | $57.81 | 8.68B | 3.62 | 0.00% | Consumer Cyclical | 30,000 | 12 hours ago | ||
| $230.03 | 92.66B | 6.74 | 1.43% | Industrials | 61,700 | 12 hours ago |
In the ever-volatile world of investing, nothing gets more thrilling than the potential for a short squeeze. When heavily shorted stocks suddenly rise, short sellers scramble to cover their positions, driving prices even higher and creating lucrative opportunities for savvy investors. This article zeroes in on three such stocks – Verisign (VRSN), CarMax (KMX), and Waste Management (WM) – that are primed to make short sellers sweat.
The Opportunity: Why Pay Attention Now?
As any seasoned investor knows, short interest levels can be a powerful predictor of future price movements. Right now, despite the prevailing trend of decreased short interest across the S&P 500, individual stocks are still seeing surges in short-selling activities. This heightened activity sets the stage for potential short squeezes, where those who can spot the signs early are in for substantial gains.
The latest mid-May short interest reports shed light on some intriguing shifts. While short interest on S&P 500 companies dropped roughly 1%, individual stocks like VRSN, KMX, and WM have continued to see increased short interest. This is despite their strong performance against the market, which adds even more fuel to the fire for a potential short squeeze.
Editor's Note: Analysis and insight for this article were originally sourced from our friends at InvestorPlace
Verisign (VRSN): A Short Squeeze Candidate with Huge Potential
On The Verge of Breaking Through
Verisign, known for its domain name registry services, is at a critical juncture. Currently hovering close to the $50 resistance level—a barrier it hasn’t breached since October 2012—VRSN is showing strong technical performance. Analysts agree that should the stock break through this resistance, it could trigger a significant upward momentum as short sellers rush to cover their positions.
The Numbers Speak Louder
What’s particularly enticing about VRSN is its sky-high short interest, which is ten times the average daily volume. In simpler terms, this immense level of short activity indicates a high potential for a short squeeze. Additionally, with analysts projecting a price target of $55 in the coming months, the conditions are ripe for substantial gains.
Beyond the Hype
VRSN isn’t just about technical levels and short interest. The company itself boasts strong fundamentals, maintaining a solid track record of growth and profitability. For investors, this means that the stock doesn’t just offer the allure of a short squeeze but also a fundamentally sound investment opportunity.
Analyst Ratings for Verisign (VRSN)
| Consensus Rating | Average Price Target | Current Price | Potential Gain | Number of Ratings |
|---|---|---|---|---|
| Moderate Buy | $207.50 | $176.26 | 17.72% | 2 |
| Buy | $227.00 | $174.99 | 21.15% | 3 |
| Moderate Buy | $218.00 | $174.97 | 24.59% | 1 |
| Moderate Buy | $207.50 | $174.97 | 16.73% | 2 |
Summary of Analyst Outlook
Analysts are generally optimistic about Verisign Inc., with a consensus leaning towards buying or holding the stock. The average price targets reflect potential gains ranging from 16.73% to 24.59%, indicating a positive market outlook. However, there are also some subdued outlooks, with analyst Baird maintaining a neutral rating and slightly lower price targets.
CarMax (KMX): Thriving Amid Economic Tailwinds!
Economic Tailwinds at Its Back
CarMax, a leader in the used car market, stands to benefit enormously from improving economic conditions. Factors such as rising consumer confidence and increased discretionary spending are providing robust tailwinds for the automobile sector. CarMax, being a dominant player, is well-positioned to ride this wave of economic improvement.
Recent Performance: A Sign of Strength
Over the past three months, KMX has appreciated more than 20%, showcasing robust market performance. This upward trend is increasing the pressure on short sellers, making a short squeeze more likely. As the stock continues to outperform, short sellers may be forced to cover their positions, thereby driving prices even higher.
A Strategic Play
CarMax isn’t just about riding economic trends; it’s a strategic play. Its recent performance and strong fundamentals make it a prime candidate for those looking to capitalize on broader economic improvements. Ultimately, KMX offers a balanced mix of solid business performance and the thrilling potential of a short squeeze.
Analyst Ratings for CarMax (KMX)
| Feature | Value |
|---|---|
| Consensus Rating | Hold |
| Average Price Target | $75.51 |
| Current Price | $72.26 |
| Potential Gain | 4.48% |
| Number of Ratings | 13 |
Summary of Analyst Outlook
The consensus among 13 Wall Street analysts is a “Hold” rating for CarMax (NYSE:KMX). The average price target for CarMax is approximately $75.51, indicating a potential gain of 4.48% from the current price of $72.26. The stock has received a range of ratings including 6 “buy” ratings, 5 “hold” ratings, and 2 “sell” ratings.
Waste Management (WM): Strong Dividend and Growth Attract Investors
Dividend and Growth: The Best of Both Worlds
Waste Management is an ideal candidate for those looking for a blend of growth and income. With a dividend yield of 3.4%, WM appeals to both growth-oriented and dividend-seeking investors. This makes the stock attractive on multiple fronts, providing a cushion against price volatility while also offering growth potential.
Impressive Year-to-Date Performance
Delivering a 26% return year-to-date, Waste Management has caught the eye of many investors. This impressive performance puts significant pressure on short sellers, making the stock a prime candidate for a short squeeze. As the stock continues to attract attention, the likelihood of short sellers being forced to cover their positions increases.
Eye on the Target
Analysts are bullish on WM, with many setting a year-end price target of $50. This represents a potential 16% increase from current levels. For investors, this means an opportunity to enjoy a defensive play with the added bonus of a short squeeze.
Analyst Ratings for Waste Management (WM)
| Source | Consensus Rating | Average Price Target | Current Price | Potential Gain | Number of Ratings |
|---|---|---|---|---|---|
| WSJ | – | – | $213.75 | – | – |
| Nasdaq | – | $220.78 | – | – | – |
| Zacks | Moderate Buy | $224.47 | $213.75 | 3.92% | 18 |
| Tipranks (1) | Moderate Buy | $224.47 | – | 5.02% | 17 |
| Tipranks (2) | Moderate Buy | $224.47 | $216.00 | 3.92% | 17 |
Summary of Analyst Outlook
The consensus among analysts for Waste Management (WM) is a Moderate Buy, with an average price target ranging from $220.78 to $224.47. This indicates varying degrees of optimism, with analysts generally expecting the stock to rise by between 3.92% and 5.02% from its current price. The forecasts vary slightly depending on the source, but overall, the sentiment is positive.
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