NeuroMetrix, Inc. (NURO): Time for a short squeeze?

Every once in a while I like to try to find a stock that is primed and ready for a short squeeze situation. Especially after a key reversal in the Market to the upside like we witnessed today.

I look for a stock that's down big in the last 52 weeks, has huge short interest - greater than at least 25% of the float, and has a positive gain in the last Month. The stock that I found is NeuroMetrix, Inc (NASDAQ:NURO).

NeuroMetrix, Inc. designs, develops and sells medical devices used to diagnose neuropathies and neurovascular disease. The Company's technology provides physicians with an in-office diagnostic system, the NC-stat System that enables physicians to make rapid and accurate diagnoses of neuropathies, including carpal tunnel syndrome, low back and leg pain and diabetic peripheral neuropathy.

Anyone who sits in front of a computer all day is at risk for carpal tunnel (that means you, reader) so keep reading this break-through analysis and make some money.

NURO's short interest is a massive 38.50%, and their stock is down -55% YTD. So why does everyone hate them? Basically, certain commercial players, including Blue Cross Blue Shield regional carriers, labeled one of their products, the "NC-stat", as experimental and investigational. This caused revenues to decline as customers experienced higher levels of claims denials, longer periods of time to receive reimbursement and an overall environment of uncertainty.

In essence, it's insurance companies doing what they do best -- screwing the consumer.

However, NeuroMetrix signaled that better times could be on the way. Particularly, the company stated that a regional Medicare carrier has issued a favorable reimbursement decision about nerve tests performed by its NC-stat devices. Specifically, the company said that First Coast Service Options will allow healthcare providers to again start billing for NC-stat tests using "traditional nerve conduction codes" -- meant for intensive tests triggering lucrative payments -- rather than problematic miscellaneous codes.

Fellow Stockmasters, we think that the +15% gain in the last month could be the beginnings of something big at NURO. The uncertainty of their Medicare revenue is already built into the price. October 30^th is their next Earnings call, if they can announce some kind of progress on the Medicare billing issue and a positive outlook, this stock is going to $15 - $20.

Article written by Eric Cheshier

Co-Founder of theStockMasters.com

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