Short-squeeze stocks produced great results in the last bull market. Investors targeted penny or meme stocks with a high short interest in big buying. An initial rally translated into short covering, which accelerated the upside. I am sure investors remember the unbelievable rally in GameStop (NYSE:GME).

This trading strategy is purely speculative stocks that made sense when the financial system had ample liquidity. The same trading strategy makes sense in non-speculative stocks today, with investors being increasingly selective amidst tight monetary policies.

I would target stocks with decent business fundamentals and high short interest as a percent of free float. One or two pieces of good news can send these stocks skyrocketing. I would bet on 100% returns on these short-squeeze stocks in the next 6 to 12 months.

Let’s discuss why these short-squeeze stocks are worth considering at current levels.

Lucid Group (LCID)

Lucid Group (NASDAQ:LCID) stock has disappointed investors with a correction of 65% in the last 12 months. With a short interest that’s at 20% of the free float, LCID stock seems poised for a short-squeeze rally. As a matter of fact, LCID stock has rallied by 27% for year-to-date 2023.

For 2022, Lucid reported production of 3,493 vehicles. For the current year, production is expected in the range of 10,000 to 14,000 vehicles. Revenue growth will likely accelerate significantly with an order backlog of 28,000 vehicles.

Lucid is also fully financed through Q1 2024 with a liquidity buffer of $4.9 billion. It’s worth noting that Lucid recently opened a studio in Oslo. This is the company’s fourth retail space in Europe. Geographical expansion is likely to boost the order backlog. Lucid has also commenced construction of its first overseas factory in Saudi Arabia.

Canopy Growth Corporation (CGC)

Canopy Growth (NASDAQ:CGC) stock has been in a sustained downtrend, with federal-level legalization of cannabis being delayed. However, there are several positive catalysts from a business perspective. CGC stock is, therefore, among the top short-squeeze stocks to consider at current levels of $2.

Another important point is that Canopy closed Q4 2022 with cash and equivalents of $789 million. In a cannabis legalization scenario, the company has ample financial flexibility for aggressive organic and inorganic growth.

Canopy Growth is also likely to have lower EBITDA level losses in 2023. The company plans $140 to $160 million in cost reduction for the year. The focus is also on making the Canadian business profitable. As the EBITDA margin improves on a relative basis, CGC stock is likely to trend higher.

Another reason to be bullish for the long term is diversified product offerings. The company’s medicinal cannabis revenue growth is likely to sustain. In the coming years, Europe is likely to be a big market for medicinal cannabis products.

Blink Charging (BLNK)

Blink Charging (NASDAQ:BLNK) stock is another name that has plunged in the last 12 months. The short interest in the stock remains above 20%. I would bet on a sharp rally for BLNK stock from oversold levels.

For 2022, Blink Charging reported 192% year-on-year revenue growth to $61.1 million. For the current year, the company is targeting revenue of $105 million (mid-range) with a gross profit margin of 30%.

Last year, the company saw witnessed a widening of EBITDA losses. However, as services revenue (recurring) increases, the company is positioned to deliver a higher EBITDA margin. Operating leverage will also drive better margins.

It’s worth noting that Blink Charging has boosted its presence across 25 countries. With a big addressable market in the U.S. and Europe, the company’s robust growth will likely sustain.

Overall, Blink Charging faces intense competition. However, the industry remains under-penetrated. There is ample headroom for growth, and the stock seems undervalued.

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.