Quantumscape, Kodak Among Analyst's Top Short Squeeze Candidates

One of the most powerful tradable market events is a short squeeze, so traders are always on the lookout for the next short squeeze candidate.

S3 Partners analyst Ihor Dusaniwsky just released a list of potential short squeeze stocks based on their high borrow rates and large mark-to-market losses for short sellers.

A stock borrow fee is the percentage of a stock’s value that brokers charge short sellers to borrow the stock. If the supply of shares to borrow gets low, borrow fees tend to rise.

“In my analysis I am looking at stocks with over $100 million of total short interest to include only stocks where the short covering from a squeeze can materially affect stock prices,” Dusaniwsky said.

When a stock’s borrow fees spike, it applies pressure to short sellers to choose between closing out their positions or letting fees eat into any potential gains.

Related Links: Why QuantumSpace Is A 'High-Level Short Squeeze Candidate'

Short Squeeze Candidates: Here’s a look at the 10 large-cap stocks with at least $100 million in short interest that have endured the largest short seller mark-to-market losses over the past month, according to S3 Partners. Month-to-date losses are included for each stock:

• Quantumscape Corp QS, -$90 million.
• Eastman Kodak Company KODK, -$47.1 million.
• Inseego Corp INSG, -$126.5 million.
• Agora Inc API, -$49.7 million.
• CEL-SCI Corporation CVM, -$28.3 million.
• CureVac BV CVAC, -$76 million.
• Blink Charging Co BLNK, -$92 million.
• Switchback Energy Acquisition SBE, -$84.7 million.
• Callon Petroleum Company CPE, -$66.1 million.
• Lemonade Inc LMND, -$177.4 million.

Benzinga’s Take: Short squeezes are extremely unpredictable, and a rise in short seller losses is not a definitive indication that a squeeze is coming. However, the combination of high short interest and rising short seller losses makes these 10 stocks worthy of being at the top of any short squeeze watchlist.