A short squeeze can generate outsize returns on capital in a hurry. This process, defined as a flood of short covering following a sharp uptick in a stock's price, can turn into a runaway positive feedback loop, sparking a parabolic upturn in a company's share price. 

Beaten-down healthcare stocks Editas Medicine (NASDAQ: EDIT) and Bluebird Bio (NASDAQ: BLUE) could be two of the market's best short-squeeze candidates right now. Both companies have become top short-seller targets in recent years, and for good reason (more on this below). With better days ahead, however, these out-of-favor biotech companies might be gearing up for a rapid turnaround. Here's what investors need to know right now. 

Editas is a small-cap genome-editing company. The biotech's lead program is an ex vivo (gene editing occurring outside the body) derived product known as EDIT-301. 

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Source Fool.com