3 Short-Squeeze Stocks to Watch Like a Hawk in November
There’s nothing better than starting the new year with a bang. From an investment perspective, it would imply quick returns from some growth stocks. If we look at the slightly speculative side, there seems to be good opportunities among short-squeeze stocks.
Back in 2021, investors made a killing by investing in stocks that have a high short interest as a percentage of free-float. Such opportunities exist even today, but the euphoria of 2021 is missing. Having said that, I believe that some short-squeeze stocks are positioned for a massive rally within the next few months. I would personally be looking at these stocks doubling from current levels.
As always, my focus is in stocks that represent companies with decent fundamentals. If business developments remain positive, I would not mind holding these stocks beyond the next few months. Let’s discuss the potential catalysts for a strong rally in these short-squeeze stocks.
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Marathon Digital (MARA)
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With Bitcoin (BTC-USD) trading at $37,000, Marathon Digital (NASDAQ:MARA) is among the top short-squeeze stocks to watch. From highs of $20 in July, MARA stock has corrected to current levels of $10.9. I believe that the stock is undervalued and, with a short interest of almost 24%, a big rally is impending.
Marathon Digital is also interesting because of positive business developments. As of Q3 2023, the company reported installed hash rate of 23.1EH/s. On a year-on-year basis, capacity has been boosted by 508%. Marathon is further targeting to reach an installed hash rate of 26EH/s by the end of the year. For 2024, the guidance is for another 30% growth in hash rate capacity.
If Bitcoin continues to trend higher, the massive growth in capacity will translate into robust revenue and cash flows. With Bitcoin halving due next year, the outlook seems bullish. Overall, I would not be surprised if MARA stock surged by 50% to 60% from current levels in quick time.
Blink Charging (BLNK)
Source: David Tonelson/Shutterstock.com
Blink Charging (NASDAQ:BLNK) stock has plunged over 71% in the last 12 months. The reason for the deep correction is the impact of intense competition coupled with cash burn. However, BLNK stock seems deeply oversold and I would bet on a big rally from current levels. With short interest still at 30% of the free-float, the stock is among the best short-squeeze candidates.
For Q3 2023, Blink reported robust revenue growth of 152% on a year-on-year basis to $43.4 million. However, adjusted EBITDA loss was at $11.7 million. The good news is that Blink is targeting positive Adjusted EBITDA by December 2024. There might still be another round of equity dilution, but the outlook seems positive for the next 24 months.
I must mention here that the company’s services revenue for the first nine months of 2023 increased by 171% to $18.5 million. As the number of charging stations installed increases, recurring (services revenue) will swell. This is likely to have a positive impact on key margins. The deep correction is therefore a good opportunity to accumulate BLNK stock.
Archer Aviation (ACHR)
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Archer Aviation (NYSE:ACHR) seems to be in a strong consolidation mode amidst a flurry of good news. With short interest at 22% of the free-float, it’s among the short-squeeze candidates to keep in the radar.
This year has been eventful for flying car stocks. Investor interest has increased as some of the best flying car companies look to commercialized within the next 24 months. Archer Aviation seems to be among the best bets.
In terms of good news, the company is targeting the commercial launch of eVTOL aircraft in 2025. However, the company’s plans are not limited to the U.S. In the last few weeks, the company has signed agreements in the UAE and India for the launch of all-electric air taxi in these countries.
Archer Aviation has also received an order from Air Chateau International for the purchase of 100 midnight aircraft worth $500 million. It’s worth mentioning here that the company already has orders worth $142 million from the U.S. Air Force. As the order book swells, Archer is positioned for stellar growth in the next few years.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.
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