CyberArk Software (NASDAQ:CYBR):
This cybersecurity name peaked my interest because of the massive bubble that formed in shares after an early 2015 rally. Shares doubled to $70 in about two weeks during February, but fell back into the $40s in less than a month. With many high profile hacking incidents in the news, cybersecurity names have been very active this year. Many of them trade at substantial valuations, which makes them attractive to short sellers. As you can see in the chart below, short interest has surged in this name this year, now over 18% of the stock's reported float.
I like this name because it continues to report strong results and raise full year guidance, which bodes well for next year too in my opinion. Since early May, the average 2016 revenue forecast has risen from $168.4 million to $192 million, with the average non-GAAP EPS forecast doubling to $0.80 per share. In 2014, the company reported revenues of $103 million and non-GAAP EPS of $0.53, so there is strong growth here. With the stock trading for 8.6 times expected 2016 revenues, the name is much more attractive than the nearly 14 times it traded for when I first covered it. Not only is the stock off its highs, but the growth forecast continues to increase. If results continue to impress, this name could be set up for a nice short squeeze.