If you’ve been trading for at least the last few years, you’ve experienced some wild trends. One of the most prevalent has been “the short squeeze” trend. Thanks to companies now considered meme stocks, high short interest mixed with higher demand have led to significant moves in the market. AMC Entertainment (NYSE:AMC), GameStop (NYSE:GME), and others have surged in popularity (and share price) since the start of the pandemic.
DNA Of A Short Squeeze
Keeping things simple, a short squeeze results in a significant spike in price generally within a short period. Traders with a sizeable short position are forced out and must cover their short as bullish buying pushed share prices higher. Because of the velocity of the impending moves, traders who are part of a short squeeze have seen breakouts to the tune of thousands of percentage points. Even higher-priced stocks with smaller floats can experience similar instances.
Take, for instance, former President Donald Trump’s Trump Media SPAC deal with Digital World Acquisition Corp. (NASDAQ:DWAC). The stock has been incredibly volatile and has seen moves of hundreds of percentage points even on a short-term time frame. Today we look at a handful of penny stocks with high short interest that can be bought for under $5 right now. Will they follow this same squeeze trend, or will short traders win the battle?
Short Squeeze Penny Stocks To Buy For Under $5
- Kidpik Corp. (NASDAQ:PIK)
- Bit Digital (NASDAQ:BTBT)
- FuelCell Energy Inc. (NASDAQ:FCEL)
- SmileDirectClub Inc. (NASDAQ:SDC)
- Inspira Technologies (NASDAQ:IINN)
Kidpik Corp. (NASDAQ:PIK)
One of the themes you see on this list of penny stocks is that some have pulled back significantly in the market this year. This is something that isn’t unique to penny stocks but the broader sectors as a whole. It has brought a lot of volatility back to the small-cap space, and Kidpik is one example.
The company specializes in eCommerce with clothing retail via a subscription service as the focus. Its primary demographic is children and offers outfits, mix-and-match, and seasonal packages. Revenue growth was a big point of interest for the market late last year, with Kidpik recording 20.3% more revenue than Q3 2020.
Earnings are expanding, and growth is notable however, the retail trading community has been focused on something a little different. That “something” is PIK stock’s share structure. More specifically, its lower float has become a focal point. Fewer than 20 million shares are generally considered “low,” and in Kidpik’s case, its float registers below 12 million shares right now.
Is PIK A Short Squeeze Penny Stock?
Today we’ll use short float data from Fintel.IO. According to the platform, PIK has a short float percentage of 69.44% as of this article. This would be considered “high” in the bigger picture by most accounts. Whether or not PIK stock squeezes will depend significantly on market activity as with other squeeze stocks.
Bit Digital (NASDAQ:BTBT)
Bitcoin and cryptocurrencies have been a red hot topic of discussion over the last few months. That’s even in light of the crypto space dropping to levels not seen since the summer of 2021. Bit Digital is a digital mining company that has centered its efforts around the environmental impact digital asset mining can have.
This week the company released an update reiterating its environmental track record. Specifically, Bit Digital expects to submit a formal testimony to the New York State Senate Standing Committees on Environmental Conservation, Energy, Telecommunication, and Internet and Technology. There are also plans to submit the testimony to certain Congress members.
Bryan Bullett, Chief Executive Officer, Bit Digital. “It is at the core of what we do and who we are because Bit Digital understands that to be successful, our operations must drive innovation and economic opportunity for all members of society—while doing so in a sustainable and eco-friendly manner.”
The eco-friendly directive has become a frequent focal point of the company. Bit Digital has ingrained itself into the ESG movement regarding cryptocurrency.
Is BTBT A Short Squeeze Penny Stock?
Right now, Fintel data shows the short float for BTBT stock sitting around 24% right now. With momentum building in crypto-related names, it will be interesting to see what comes next for BTBT heading into February.
FuelCell Energy Inc. (NASDAQ:FCEL)
Sticking with the ESG/Green energy focus, FuelCell Energy is on the list of penny stocks to watch right now. The company specializes in fuel cell technology development and producing clean energy.
Following an earnings miss late last year, FCEL stock has declined. One of the other leading factors impacting the company was its legal proceedings with POSCO Energy, which seem to have gained more clarity as of last quarter.
Jason Few, President and CEO. “Since the end of fiscal year 2021, we have favorably resolved our legal proceedings with POSCO Energy Co., Ltd. and clarified our access to the Asian market. We have also advanced through commissioning our 7.4 megawatt power platform located at the U.S. Navy Submarine Base in Groton, CT and our 7.4 megawatt power platform in Yaphank, NY. And, importantly, we extended our joint development agreement with ExxonMobil Research and Engineering Company until April 30, 2022.”
What’s more, the company’s Long Island, NY project gained conditional commercial operation this month. That has also given a boost to some much-needed bullish sentiment.
Is FCEL A Short Squeeze Penny Stock?
According to Fintel data right now, FCEL stock’s short float percentage sits around 18.8%. Thanks to growing interest in ESG and clean energy stocks, FCEL could be one to watch.
SmileDirectClub Inc (NASDAQ:SDC)
SmileDirectClub has brought some smiles to the faces of traders who’ve watched this stock for the last few weeks. SDC shares have managed to climb from lows of $1.76 last week to highs of over $2.50 this week so far. The company has become popular among millennials seeking at-home oral care. Whether it’s teeth whitening or straightening, SmileDirect has aimed at a growing trend of in-home, personal care.
Last week the company launched its wireless pro whitening system plus. Amy Keith, General Manager of Global Oral Care at SmileDirectClub, explained, “The new Wireless LED Whitening Light in the Pro Whitening System Plus utilizes advanced technology to bring even more convenience to our customer’s teeth whitening routine.”
Is SDC A Short Squeeze Penny Stock?
Fintel data shows a short float percentage of 30% on SDC stock. Considering the latest move in the stock market today, it appears bullish momentum continues driving the latest uptrend.
Inspira Technologies (NASDAQ:IINN)
While it isn’t the highest short float percentage stock on this list, Inspira is on retail traders’ radars this week. The company develops respiratory support technology. In particular, Inspira has been signing new deals to distribute its ART device, its respiratory support system that functions as an artificial lung.
The latest agreement was with Glo-Med Networks Inc. for distribution across six states in the US. These include Florida, the Carolinas, New York, New Jersey, and Texas. Joe Hayon, Inspira Technologies’ Co-Founder, President, and Chief Financial Officer, explained, “It is an important milestone in the Company’s strategy to setup the infrastructure to penetrate the U.S. market…Upon approval of our ART by relevant regulatory authorities, the U.S. market size can provide Inspira Technologies a potential for the deployment of the ART. The Company is developing further infrastructure to penetrate the remaining U.S. states to adopt the ART system.”
Is IINN A Short Squeeze Penny Stock?
Looking at data from Fintel.io, we can see that the short float percentage on IINN only sits around 3.23% as of this article. But with fewer than 10 million shares outstanding, the structure of the penny stock also lends itself to the highly volatile swings that IINN stock has seen over the last few months.
Penny Stocks, Risk & Reward
Whether you’re looking for a short-term trade or a longer-term investment, penny stocks offer a lot of potential. When it comes to short-squeeze stocks, the name of the game is volatility. So if this is a topic that interests you, make sure to familiarize yourself with a trading style well-situated for such wild market action.
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