3 Short-Squeeze Stocks to Buy Before June for 50% Returns

Going by the price action in some stocks in the recent past, it seems that the meme stock euphoria is at its early stage. Potential rate cuts to boost economic growth will likely be a perfect recipe for a full-fledged meme stock season. It’s, therefore, a good time to look at some short-squeeze stocks to buy for quick returns in the blink of an eye.

I always prefer to keep expectations on a base-case scenario. Therefore, I expect a 50% rally in the short-squeeze stocks discussed. However, a 2x or 3x rally in a few months is likely if the meme stock euphoria gathers steam.

Also, the ideas discussed in the column are purely speculative. As of today, I would refrain from taking investment positions in any of these stores. The stocks discussed are purely trading bets with average to weak fundamentals.

Let’s talk about the reasons that can serve as a possible catalyst that triggers the big short-squeeze rally.

Lucid Group (LCID)

Lucid Stock (NASDAQ:LCID) is among the hot favorites for a big short-squeeze rally. LCID stock has been on a downturn with a correction of almost 60% in the last 12 months. While bullish on a short-squeeze rally, I would avoid the stock as a long-term investment idea.

Recently, Biden announced a 100% tariff on Chinese-made electric vehicles. This is a potential catalyst for a meaningful rally from deeply oversold levels. Intense competition has impacted Lucid, and the announcement will likely translate into some optimism for the stock.

Specific to Lucid, a liquidity buffer of $5 billion is a positive even as cash burn sustains. Further, the management is optimistic about the impending launch of Lucid Gravity. These positives are not big enough to believe Lucid will create value in the coming years. However, it provides a good reason for speculators to build long positions for a big rally in quick time.

Aurora Cannabis (ACB)

Aurora Cannabis (NASDAQ:ACB) stock is another name with high short interest and looks poised for a big rally. An important point is that one trigger for a short-squeeze or meme stock rally is impending news that can be a game-changer.

When Biden was elected President in 2021, cannabis stocks delivered 10x to 20x returns in a few months. This was in anticipation of the federal-level legalization of cannabis. With Presidential elections due later this year, the legalization of cannabis will be a hot topic for discussion. This will translate into some excitement and a potential rally for cannabis stocks.

It’s worth noting that Aurora Cannabis is well diversified geographically, with a presence in 15 countries. For Q3 2024, the company’s international medicinal cannabis revenue increased by 41% yearly. If healthy revenue growth is sustained, it’s likely to translate into EBITDA margin expansion. With improving fundamentals and the likelihood of regulatory tailwinds, ACB stock is positioned for a big short-squeeze rally.

Beyond Meat (BYND)

Beyond Meat (NASDAQ:BYND) stock was among the market’s darlings. Towards the end of 2022, BYND stock was trading near $200. The meltdown has, therefore, been significant, with the stock trading in single digits. Even after the big crash, the short interest in the stock remains above 40%. I believe the stock is oversold and poised for a massive short-squeeze rally.

Recently, Beyond Meat reported Q1 2024 numbers. Revenue declined 18% on a year-on-year basis to $75.6 million. The company also reported an adjusted EBITDA loss of $32.9 million. Beyond Meat is struggling.

However, it’s too early to believe that the story is over. In April, the company launched the fourth generation of Beyond Burger and Beyond Beef. According to the company, the “products’ meatier flavor and taste were preferred over the previous version in consumer testing.” The coming quarters will tell if there is a positive impact on financials.

For now, oversold levels coupled with the new launch will likely trigger a short-squeeze rally. This is particularly true at a time when meme stocks are back in action.

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.