How advanced are you when it comes to making money with penny stocks? If you’re new to this market, you may want to stop reading for a moment and check out some of our intro-to-penny-stocks articles:
- What Is A Penny Stock?
- Penny Stocks, Common Technical Indicators To Know
- How Long Should You Hold Penny Stocks?
- Penny Stocks For Beginners; How To Buy, Trade, & Make Money
- How To Buy Penny Stocks In 2019
If you’re experienced with penny stocks, you can check out those articles as a refresher and then keep reading. It’s well known that penny stocks are high risk-high reward stocks. These cheap shares can breakout big within a matter of days or even hours. But if you’re an even bigger risk-taker, you may start looking for low float penny stocks.
Let me start by saying that low float penny stocks are not for the faint of heart. As most penny stocks can jump quickly, the lower the float, the higher the likelihood that a penny stock will break out within the blink of an eye. We saw this happen to a “T.”
We discussed NF Energy Saving Corporation (BIMI) over the weekend explaining how the low float could be its own catalyst. With big news, the float plus the announcement catalyst sent the stock soaring from $1.55 to highs of $11.80 after hours on Monday. That’s over 660% from open to aftermarket highs!
So it makes sense that if you like the highest of high risk/high reward, low float penny stocks are something you’re interested in.
What Are Low Float Penny Stocks?
To first understand this, we need to understand the term “float” or “public float.” This is defined as shares of a company that is in the hands of public investors. This is in comparison to shares held by insiders, controlling shareholders, even governments.
As a rule of thumb, the public float is what’s left over after subtracting the restricted stock from shares outstanding. The restricted refers to stock that can’t be traded because it is in a lock-up period or hasn’t been registered or deposit yet. Typically, a low float could be defined as anything below 10 million shares. This is subjective to an investor and has a lot to do with the capital size.
But for all intents and purposes, this is a relatively good level to consider as “low float” in my opinion. Just remember, the lower the float, the faster a stock will typically move when there’s above-average volume at play; that’s in both directions. Now that we know this, let’s take a look at a few low float penny stocks to watch this month.
Low Float Penny Stock #1 New Concept Energy (GBR)
Take a look at the profile page for New Concept Energy (GBR Stock Profile) and you’ll see that it’s OS as of 10/14/2019 is just over 5 million shares. Further, on other sites like Yahoo Finance (YF) and FinViz (FV) the floats are listed in agreement at about 2.07 million shares.
The company has been among the big winners of the energy sector this week. The main focus of New Concept is owning and operating oil and gas wells in addition to mineral leases in Ohio & West Virginia.
Last Friday, GBR stock started creeping up. On October 14, the stock saw another day of above-average trading with nearly 600,000 shares traded. Besides the excitement in the energy sector, New Concept hasn’t put out any recent news. It may be safe to say the major catalyst here is a sector-wide one. Something to keep in mind if GBR ends up on your penny stock watch list this week.
Low Float Penny Stock #2: SCWorx Corp (WORX)
Another low floater, SCWorx Corp (WORX Stock Profile) saw a bit of waking up this week. After plummeting from highs of $4.21 to lows of $2.15 this month. The company focuses on virtualization and artificial intelligence technologies. On Monday, WORX stock saw its first sign of bullish life with more than 70,000 shares traded and a move of 16%. Considering the number of shares traded, that shows exactly how quickly low float stocks can move.
Shares outstanding show a little over 6.5 million with YF and FV reporting 5.9 and 4.9 million shares respectively. This is an example of why I said to check multiple sources for share information. While the OS is usually the same, the float can vary.
Last week the company appointed a new board member, Steven Wallitt who has a specialized background in deal-making. Because Monday was the first day of noticeable volume, WORX stock may find itself on a few lists of penny stocks this week but we’ll see what happens as the week rolls on.
Low Float Penny Stock #3: SAExploration Holdings Inc. (SAEX)
Third on this list of low float penny stocks, SAExploration Holdings (SAEX Stock Profile). This is another energy penny stock focused on oil and gas services across North and South America. Late in September, the company announced receipt of an award for a marine project valued at roughly $28 million. The 55 day project will entail SAExploration conducting data acquisition.
Besides that and a plethora of class action press releases from third party law firms, SAEX has been quiet this month. Similar to GBR, SAEX stock may have started benefiting from the surge in energy stocks.
Our site shows an outstanding share count of 4.29 million shares. Both YH and FV agree on a float of 4.21 million shares. After trading only 1.4 million shares, SAEX jumped more than 40% on October 14. Is this going to be a stock to watch later this week?
Low Float Penny Stock #4: Top Ships Inc. (TOPS)
Finally, the last penny stock on this list is Top Ships (TOPS Stock Profile). This shipping stock is no stranger to sporadic breakouts. Here’s where things get interesting. The OS on TOPS stock is – ready – under 2 million. It varies between platforms but nothing on YH, FV or PennyStocks.com shows an OS over 2 million shares.
TOPS stock has been steadily climbing for the last few days coming to a head-on October 14. The stock traded over 2 million shares and jumped 29% in a single day.
There have been no recent announcements from the company. Furthermore, the last filing (from September 2019) shows and update from several institutional shareholders. Check that out here. Since Top Ships is involved in the transportation of petroleum products, it may be benefiting from a rise in energy stocks. Will it be on your penny stocks watch list this week?
Simple Way Of How To Find Low Float Penny Stocks
Now, not all low float penny stocks are a buying opportunity. In fact, many will have few shares in the market and never really trade. These ghost ships tend to see intermittent jumps but consistency or “real business” usually doesn’t go with it. In sticking with the initial plan, I personally try to look for stocks that have some kind of daily volume and a real business.
Again, keep in mind that these are hugely risky and there’s a good chance you can lose your whole position based on how quickly lower float penny stocks fluctuate. If you’re still here, great. Let’s look into the basics of finding low float penny stocks.
For starters, some penny stock trading platforms let you search by the float. However, access to this could cost extra. One of the top ways to find low float penny stocks is to compare the shares outstanding. If you look at the OS, it will never be lower than the float (unless there’s a typo on the site you’re looking at).
At most, a fully diluted stock will have the OS and float at the same amount. So if you can’t find float information, an easy trick is to look at the OS. There’s a good chance that a low OS means a lower float. As a safety, I’ll compare the OS across multiple outlets including the info pages on PennyStocks.com. Once you find the companies, make a list of penny stocks and then start your research!