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There's no way to predict with 100% accuracy what stocks will face short squeezes or when they could happen. However, companies with high short interest and potential business tailwinds are prime candidates.

Seritage Growth Properties reported Q2-2023 results which were loaded with asset sales. Cash burn still remains high, and the impairment did not help inspire confidence in the terminal value. We examine how our previous suggestion worked out and give you three ways to outperform Seritage again.

In our last article, we shunned the idea that Seritage shareholders had a big payday ahead. Realistic valuations suggested that the stock was trading at a fair price for liquidation and the best bullish bet was a covered call trade.

Seritage Growth Properties reduced its term loan balance to $800 million in early February, extending its remaining debt maturities to July 2025. Removing liquidity risk hasn't boosted Seritage stock, though, due to investors' concerns about the impact of weak macro conditions on the pace and valuation of future property sales.

Seritage Growth Properties stock has retreated from the high reached this summer due to fears about the impact of soaring interest rates and a potential recession on its liquidation plan. Despite these fears, Seritage continues to sell assets at a rapid pace.

The ex-REIT is in the process of liquidating its assets and paying off its liabilities. Proceeds from the sale, after its debt obligations, will be returned to shareholders estimated at between $18.50 and $29 per share.

Seritage has a liquidation plan. The $100 million debt paydown was nice to see but there is a tall mountain to climb.

Last month, Seritage Growth Properties filed preliminary proxy documents asking shareholders to approve a plan of sale that would effectively liquidate the company. Seritage stock currently trades at a steep discount to the anticipated distribution range of $18.50-$29 per share.

After doubling so far in July, Seritage Growth Properties stock could potentially double again over the next two or three years.

Asset sales could be about to accelerate.