10 Top Shorted Stocks for Longer-Term Buyers

While several of Wall Street's most shorted stocks are just a playground for traders, others sport legitimate long-term buy cases. Just beware the volatility.

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GameStop (GME) has become a top-of-mind name on Wall Street in 2021 in the most improbable of ways.

The brick-and-mortar video game retailer was among the market's most heavily shorted stocks to start the year – but a group of investors, sparked by the Reddit community r/WallStreetBets, sparked a campaign to purchase shares. The primary reasoning was that a sudden spurt of buying could trigger a "short squeeze" of people who betting against the company, driving GameStop's shares even higher.

"We think the bulk of ... gains was driven by a short squeeze and very little has changed in GME's fundamental story," says CFRA analyst Camilla Yanushevsky, who rates the stock a Sell.

GME shares had gained 1,740% between the start of the year and Jan. 27 before hitting a severe patch of volatility. At the height of the video game retailer's short interest, roughly 140% of its "float" (shares available for public trading) was being used to bet against the stock.

Many short squeezes end the same way: Buyers lock in their gains, and the stock settles back to earth. However, several heavily shorted stocks currently boast real fundamental bull cases for longer-term buyers. Some haven't yet been caught up in a short squeeze, so they could benefit from one as soon as enough investors realize the improvements they've been making. Others have already been squeezed higher and could dip once short-term traders tire, providing a better entry point for buy-and-hold investors.

Here, we look at 10 of the top shorted stocks that are worth a much more serious look. In each case, short interest accounts for at least 10% of the float – a high number that points to a greater likelihood of a short squeeze. We'll explain why each stock here could be more than just the flavor of the week.


Data is as of Jan. 31. Short interest data provided by S&P Global Market Intelligence. Stocks listed in reverse order of shares sold short as a percentage of the float.

Will Ashworth
Contributing Writer, Kiplinger.com

Will has written professionally for investment and finance publications in both the U.S. and Canada since 2004. A native of Toronto, Canada, his sole objective is to help people become better and more informed investors. Fascinated by how companies make money, he's a keen student of business history. Married and now living in Halifax, Nova Scotia, he's also got an interest in equity and debt crowdfunding.