In this article, we discuss the 10 best high short interest stocks to buy now. If you want to read about some more high short interest stocks, go directly to 5 Best High Short Interest Stocks to Buy Now.
Stock markets have long provided opportunities for investors to raise capital and change the world for the better. Indeed, stocks are one of the most reliable vehicles for investors in terms of returns and profit gains. Stock markets in the US, the largest in the world, are a power hub of the country and generate revenues to strengthen the economy. Some of the top stocks at these markets include Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Meta Platforms, Inc. (NASDAQ:FB).
In recent years, the rise of fintech has forced investors to reconsider investments in traditional stocks. In a volatile market, elite investors are shorting speculative bets to balance their risk portfolios. Some of these short bets might present an interesting short squeeze opportunity.
At the beginning of 2021, retail investors had banded together and earned hundreds of millions by betting against hedge fund shorts. Since then, interest in stocks with high short interest, some of which offer solid long-term potential, has climbed rapidly. As a sense of normalcy returns to the market in light of recent inflation numbers and comments from top economic experts regarding the possibility of a recovery, these high short interest stocks are slowly making their way back into the spotlight.
Our Methodology
The companies that have a short interest of more than 20% were selected for the list. The short interest of each stock was taken from Yahoo Finance. The analyst ratings of these firms and the latest updates related to them are also discussed to provide some additional context. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
We called them the “best” stocks to consider because despite the high short interest, several Wall Street analysts have given positive ratings to these firms. Some of these companies also show positive hedge fund sentiment. These stocks also have chances to ride the wave of short squeezes launched by Reddit investors.
Photo by Austin Distel on Unsplash
Best High Short Interest Stocks to Buy Now
10. Lemonade, Inc. (NYSE:LMND)
Number of Hedge Fund Holders: 15
Short Interest as of November 14: 22.96%
Lemonade, Inc. (NYSE:LMND) provides insurance products. In early August, the company announced that it had offloaded the Enterprise Business Solutions platform to digital insurance firm EIS in an all-cash transaction. The solution was a claims automation and fraud detection platform which Lemonade licensed to large insurance carriers. The platform was owned by Metromile, a firm that Lemonade acquired in late July.
On November 10, Barclays analyst Tracy Benguigui maintained an Equal Weight rating on Lemonade, Inc. (NYSE:LMND) stock and lowered the price target to $18 from $28, noting the disappointing earnings of the firm in the third quarter of 2022.
At the end of the third quarter of 2022, 15 hedge funds in the database of Insider Monkey held stakes in the company, compared to 9 funds in the previous quarter. This shows that hedge fund interest in the company rose in the third quarter.
In contrast to established names like Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Meta Platforms, Inc. (NASDAQ:FB), Lemonade, Inc. (NYSE:LMND) is one of the most shorted stocks right now that offers an interesting risk/reward profile for shrewd investors.
9. P3 Health Partners Inc. (NASDAQ:PIII)
Number of Hedge Fund Holders: 12
Short Interest as of November 14: 27.74%
P3 Health Partners Inc. (NASDAQ:PIII) is a patient-centered and physician-led population health management company that provides superior care services in the United States. On August 30, P3 Health Partners Inc. (NASDAQ:PIII) announced that P3 Health Nevada is expanding its footprint in Nye County with a recent acquisition in cardiology and multi-specialty practice.
At the end of the third quarter of 2022, 12 hedge funds in the database of Insider Monkey held stakes worth $13.2 million in P3 Health Partners Inc. (NASDAQ:PIII).
8. MicroStrategy Incorporated (NASDAQ:MSTR)
Number of Hedge Fund Holders: 15
Short Interest as of November 14: 35.13%
MicroStrategy Incorporate (NASDAQ:MSTR) provides enterprise analytics software and services worldwide. It is one of the most shorted stocks to consider investing in. On November 1, MicroStrategy Incorporate (NASDAQ:MSTR) posted earnings for the third quarter of 2022, reporting losses per share of $0.96. The revenue over the period was $126.36 million, down 1.3% compared to the revenue over the same period last year and beating market estimates by $0.56 million.
On August 3, Canaccord analyst Joseph Vafi maintained a Buy rating on MicroStrategy Incorporated (NASDAQ:MSTR) stock and lowered the price target to $372 from $453, highlighting that the company continues to innovate in its dual strategy of being both an operating company and a modestly leveraged investment play in digital assets.
As of the end of the third quarter, 15 hedge funds in our database of 920 funds had stakes in the company, compared to 18 funds out of 895 funds tracked in the previous quarter.
7. Beyond Meat, Inc. (NASDAQ:BYND)
Number of Hedge Fund Holders: 14
Short Interest as of November 14: 40.66%
Beyond Meat, Inc, (NASDAQ:BYND) manufactures, markets, and sells plant-based meat products in the United States and internationally. It is one of the most shorted stocks to consider investing in. On October 27, Beyond Meat, Inc, (NASDAQ:BYND) unveiled that it has added steak to its lineup of meat alternatives. Beyond Meat launched Beyond Steak at Kroger and Walmart stores nationwide as well as Ahold divisions, select Albertsons and other retailers across the country.
On October 17, Canaccord analyst Bobby Burleson maintained a Hold rating on Beyond Meat, Inc. (NASDAQ:BYND) stock and lowered the price target to $14 from $15, noting that the company announced a lower 2022 revenue outlook and cut nearly 20% of its workforce due to weaker-than-expected demand and increased competition.
At the end of the third quarter of 2022, 14 hedge funds in the database of Insider Monkey held stakes in the company.
In its Q1 2022 investor letter, Horos Asset Management, an asset management firm, highlighted a few stocks and Beyond Meat, Inc, (NASDAQ:BYND) was one of them. Here is what the fund said:
“What about the other asset class that has attracted the most attention from the investment community in recent times? Beyond Meat, Inc, (NASDAQ:BYND) is the other company whose valuations we did not understand and whose share price has also declined drastically in the last year and a half.”
6. Revolve Group, Inc. (NYSE:RVLV)
Number of Hedge Fund Holders: 18
Short Interest as of November 14: 31.19%
Revolve Group, Inc. (NYSE:RVLV) operates as an online fashion retailer for consumers in the United States and internationally. It is one of the most shorted stocks to consider investing in. On August 3, Revolve Group, Inc. (NYSE:RVLV) posted earnings for the second quarter of 2022, reporting earnings per share of $0.22, missing market estimates by $0.09. The revenue over the period was $290.05 million, up 26.9% compared to the revenue over the same period last year and missing market estimates by $2.83 million.
On October 26, Baird analyst Mark Altschwager maintained an Outperform rating on Revolve Group, Inc. (RVLV) stock and lowered the price target to $30 from $35, noting that near-term setup for the shares remains difficult and had led to moderate growth rates and margins in an increasingly challenging/competitive backdrop.
Unlike prominent firms like Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Meta Platforms, Inc. (NASDAQ:FB), Revolve Group, Inc. (NYSE:RVLV) is one of the most shorted stocks right now.
In its Q2 2022 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Revolve Group, Inc. (NYSE:RVLV) was one of them. Here is what the fund said:
“Revolve Group, Inc. (NYSE:RVLV) is an e-commerce fashion company we believe is executing well. The stock weakness during the period was more sentiment-driven as the market grew increasingly concerned about consumer spending during a recession.
We acknowledge that there could be some softness in the company’s near-term results as consumers tighten their purse strings, but we believe there remains tremendous long-term potential for this business. We have also observed that Revolve Group, Inc. (NYSE:RVLV) management team is exceptional when it comes to navigating unprecedented challenges, as they did during the pandemic and have a long history of doing so since being founded in 2003 and bootstrapped by their founders. Management preparedness is an important marker we are looking for during this challenging time and Revolve Group, Inc. (NYSE:RVLV) management team unquestionably passes the test in this area. We added to our position on this weakness.”
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Disclosure. None. 10 Best High Short Interest Stocks to Buy Now is originally published on Insider Monkey.