5 Short Squeeze Candidates To Watch: Insignia Systems Tops List With High Cost To Borrow, SeaChange Joins

Potential short squeeze plays gained steam in 2021 with new retail traders looking for the next huge move.

A short squeeze can occur when a heavily shorted stock rises in value instead of falling. Short sellers could be looking to close out their position and can face a loss if they have to buy back the shares they initially borrowed at a higher price.

A squeeze can occur when short sellers are forced on buying in to cover their position, which has caused shares to go much higher on many occasions.

Fintel Data: Data from Fintel, which requires a subscription, provides a look at several of the top shorted stocks and data showing how likely a short squeeze is to occur.

This week’s leaderboard includes only one name from last week’s top five and a new name to the list that recently announced a major merger.

Here’s a look at Fintel’s top five short squeeze candidates for the week of Jan. 3.

1. Insignia Systems: Digital advertising company Insignia Systems, Inc. (NASDAQ: ISIG) tops the short squeeze leaderboard to start the 2022 trading year. Raw short interest in ISIG is up more than 2,500% from the last reporting period and Fintel shows 61.6% of the company’s public float short. The cost to borrow on shares is 556%, which is the highest Fintel has seen in recent history. The high short percentage and cost to borrow could make the stock an ideal candidate for a short squeeze.

2. American Virtual Cloud Technologies: IT solutions provider American Virtual Cloud Technologies Inc (NASDAQ: AVCT) ranks second on the short squeeze leaderboard for the week. Around 11.5% of the public float is shorted and Fintel shows short interest up over 3,400% from the previous report. The reported cost to borrow on AVCT shares is 191.7%, which is among the highest on the list.

3. Petros Pharmaceuticals: Men’s health pharmaceutical company Petros Pharmaceuticals Inc (NASDAQ: PTPI) is the lone carryover in the top five ranked stocks and remains in third place on the leaderboard. Fintel reports 24.4% of the total float short, up from last week’s 17%. The cost to borrow on shares of 176% is down from the last three week’s reported 268%, 254% and 240%, respectively. The stock previously topped the leaderboard for several weeks.

Related Link: 5 Short Squeeze Candidates To Watch: Biofrontera Rejoins And Tops List, 2 New Names Enter

4. SeaChange International: Multiscreen video solutions company SeaChange International Inc (NASDAQ: SEAC) made headlines when it announced recently it would merge with video provider and TikTok competitor Triller. Short interest in SEAC is up 751% from the prior report, which Fintel points out could indicate increased negative sentiment by short-sellers. The cost to borrow on SEAC shares is 24.4%, which is the lowest on the leaderboard. Fintel reports 13.1% of the SEAC tradeable float short. The stock could be one to watch with its first appearance on the leaderboard with the pending merger.

5. Ensysce Biosciences: Clinical stage biotech company Ensysce Biosciences Inc (NASDAQ: ENSC) is seeking to bring tamper-proof opioids to market. The company is ranked fifth on the Fintel short squeeze leaderboard. Fintel shows 10.9% of the total float short with raw short interest up 702% from the previous report. The cost to borrow on ENSC is 211.8%, which is among the highest for the week.

Image by Raquel Baires from Pixabay