ISIG gained 50% right before market open and then reached a high of $20.87, up 80% since yesterday’s close. There does not seem to be any news out. However, ISIG sits at number two on the short interest list. As many eyes turn to the stock, many eyes will also be looking out for the next squeeze to have their edge on everyone else. Here’s one stock that we think can follow ISIG.
STRN recovered well from the $3 zone and reached a high of $6.99. Momentum was growing for the stock. A filling was then announced for a private placement which saw some selling pressure enter. The private placement allowed shareholders to have the ability to sell their shares. This is different from a stock offering where a company sells more shares to the public to raise capital.
In fact, as STRN is a recent IPO, there is no need for them to raise more capital. The company has approximately $40M in cash and has said they have “no plans to raise capital over the next six months.”
STRN has shot up to number four on the short interest list over the last week. The data now shows a 50.9% SI. Where have these shorts come from? Many would have been enticed by the private placement. Normally, offerings would drop the share price and depending on the size, can drop the price substantially, killing any growing momentum. We believe shorts have been betting on more fear after the private placement.
Also, STRN has a very high borrow rate, 191%. This means there is vigorous short sale activity in a stock (which we know due to the SI) and the long side is fighting back by not providing shares to the stock borrow market. This suggests volatility as longs and shorts collide.
As STRN starts to release more news for investors, short sellers will be forced to cover as the price grows.
Next big squeeze
We think the combination of these factors make STRN one of the top targets for a short squeeze. We also think that STRN is a top watch throughout next year as a market leader as a distributor of promotional products and branded merchandise. They are looking to explore accretive acquisitions and invest in sales and marketing initiatives.
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