Short Squeeze Stock To Buy – More Short Interest Than AMC

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Today, we'll show you the next short squeeze stock to buy. It has even more short interest than AMC right now.

Investors researching to uncover their own meme stocks may find hundreds of companies with a market cap of at least $100 million and short interest of 15% or more. But our Chief Investment Strategist, Shah Gilani, has done all the hard work for you.

Meme stocks have been all the rage this year. Shares of GameStop Corp. jumped as high as 2,500% in January after traders noticed its short interest inflated to record highs.

While there's no real definition of what makes a meme stock, heavily shorted companies attract the most attention on social media and Reddit.

Here's the next stock set to pop from a short squeeze in the near future.

PetMed Is Your Next Short Squeeze Stock

PetMed Express Inc. (Nasdaq: PETS), "America's most trusted pet pharmacy," could easily miss your radar. This online pet store has all the makings of a meme stock – and your next short squeeze play.

The Florida-based company makes 2,500 of the most popular pet medications, health products, and supplies for dogs, cats, and horses. It delivers pet owners' needs directly and is a licensed pharmacy in 50 states.

America is in the midst of the biggest pet boom it's ever experienced. Thanks to the pandemic, our social lives drowned away while Americans were locked at home, lonely, and looking for company.

For 11.2 million of those Americans, it meant getting a pet. And those numbers translate to how much was spent on new furry friends. Reports show over $100 billion was spent on pets in 2020, more than ever before.

This increase in pet ownership and increased spending on pets are a couple reasons why the animal health market is growing, but another is the fact that pets today live longer than ever before. This is due to a combination of advancements made in the pet care industry and a shift in the way people think about their pets.

Forecasts predict the $100 billion pet care market will reach $358.62 by 2027. Vet care and health product sales had $30.2 billion in revenue in 2020 alone, driving proof that pet owners feel a new kind of responsibility for their companions.

Thirty-one percent of pet industry customers are millennials, which make up for 30% of e-commerce sales across the board. Sixty-seven percent of the generation reported they would rather do all their shopping online and will continue to shop online.

An online, credible option like PetMeds has nothing to lose and everything to gain from this new generation of pet owners that look at their pets as companions and already drive e-commerce sales.

So then why has PetMed gone unnoticed?

Why PetMed Flies Under the Radar

Looking at the big picture, PetMed is a relatively small company. With just under 200 employees and a $662 million market cap, it's well below the $1 billion cap people typically look for, especially when it involves a short play.

Not only is it a smaller company, but its growth has been modest. Averaging 4.7% business growth, it hasn't experienced a massive jump in any particular year.

But it's maintained steady market development consistently. With $309 million in revenue and a 10% margin, it brings in about $130 million in profits a year.

This steady growth should not discourage investors. In fact, it should be reassuring. PetMed has the only attractive yield in the pet stock realm, and it has no debt.

Not only is the company consistently profitable and growing every year, but its 3.46% dividend yield literally pays shareholders to hold the stock.

Finally, here's what you do with this stock.

How to Play the PetMed Short Squeeze

PetMed is a short squeeze play with massive upside as 39% of the floating shares have been shorted. In fact, PetMed sits in the top 20 most-shorted stocks with short interest above 30%.

Shorter top-line growth has resulted in higher short interest for the stock recently. It's more heavily shorted than AMC. And if it got even one-fourth as many people buying, it would surpass GameStop.

When Reddit catches on to that, this could very well become the next big meme stock, and that's exactly why you want to get in now.

With earnings set to come out July 19th, it's worth buying now before it's too late.

Shah recommends buying the stock for the dividends because it's a great company. But think about some call options ahead of the earnings report. If the report is better than expected and the Reddit crowd catches on, you'll be in good shape sitting on those options.

Sitting at $33.50, a "big squeeze" could see a 58% increase, and worst-case scenario, you hold onto safe stock for a growing company.

Disclaimer: Any performance results described herein are not based on actual trading of securities but are instead based on a hypothetical trading account which entered and exited the suggested ...

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