Penny Stocks Article TL;DR Overview
- High short interest is something that retail traders seek to find stocks that may hold potential for aggressively bullish swings.
- When penny stocks experience a short squeeze, that can compound momentum in the market.
- In this article, we look at 5 penny stocks with higher levels of short interest.
Penny stocks are well known for their risk and reward. But certain factors can amplify things a bit more, especially when it comes to volatility. Novice investors may only look for companies releasing news or filing new corporate documents. That’s not a bad thing; however, there’s more to keep track of, especially if you’re hunting for potential momentum stocks.
What’s A Short Squeeze?
The biggest reason traders look for stocks with high short interest is the potential for a squeeze to trigger. If you’re newer to this phenomenon, let’s get you up to speed. First, what is shorting? Shorting is when investors bet against a company and expect share prices to fall.
In order to capitalize on a downward move, they’ll short a stock by borrowing shares from a broker, selling them in the open market, then repurchasing those shares at a lower price to return the share loan. The difference in price from selling to repurchasing becomes the gain on that trade.
A short squeeze triggers when short traders are wrong, share prices go up instead of fall, and they’re forced to repurchase shares at higher prices. This ultimately results in a loss on the trade, but it does something else too.
Considering prices are already on the rise, buying momentum from short covers in addition to retail buying can compound a stock’s bullish move. This is where you’ll see certain penny stocks not only climb, but all of a sudden explode in price. The first place to start is by making a list of penny stocks and focusing on those with higher short interest and/or lower public floats (actively circulating supply in the market).
Short Squeeze Penny Stocks To Watch
- Inspira Technologies (NASDAQ: IINN)
- Selecta Biosciences Inc. (NASDAQ: SELB)
- Protalix BioTherapeutics Inc. (NYSE: PLX)
- Spruce Biosciences (NASDAQ: SPRB)
- Tellurian Inc. (NYSE: TELL)
Inspira Technologies (NASDAQ: IINN)
Similar to SPRB, Inspira is no stranger to sporadic moves in the stock market. IINN stock has surged significant percentage points within a single session on more than one occasion. The largest came in October when the penny stock skyrocketed from under $2.40 to $9.59.
The initial move came after the company announced an exclusive distribution deal with Anita Técnica, one of Spain’s larger medical supply companies. Anita will purchase a minimum of 1040 ART devices for distribution at hospitals and medical centers during a 7-year period. The ART device is a respiratory support system that functions as an artificial lung.
Recent IINN Stock News
The most recent excitement has focused on yet another distribution deal. This time it was with Innovimed, signed earlier this month. The exclusive agreement targets Eastern European, Middle Eastern, and African markets. Innovimed has committed to purchase minimum orders of 1,552 ART devices.
Is IINN A Short Squeeze Penny Stock?
With a short float of roughly 9.6% right now, this isn’t the highest on the list by far. However, given that fewer than 10 million shares are outstanding with a lower float, it could be one of the reasons why IINN is on some traders’ lists of penny stocks to watch right now.
Selecta Biosciences Inc. (NASDAQ: SELB)
Shares of Selecta are hovering in familiar territory right now. If you look at the SELB stock chart, this area has been tested three times since the beginning of 2021. Each time, it managed to bounce. Will that be the case this time around? Since Selecta’s announcement that it and Swedish Orphan Biovitrum completed enrollment for the DISSOLVE I study, momentum seems to have come back into the market.
Recent SELB Stock News
As a biotech company, Selecta’s pipeline has been a core focus point for the market. In this light, the DISSOLVE I enrollment was a key milestone for developing its SEL-212 treatment candidate for chronic refractory gout. The treatment combines the company’s ImmTOR immune tolerance platform with pegadricase. The significance of the enrollment completion is that it is part of a phase 3 study program. Top-line results are expected during the second half of next year.
Is SELB A Short Squeeze Penny Stock?
In this article, we’ll use short float percentage data from Fintel.io. Accordingly, the most recent information shows SELB stock’s short float percentage sitting around 8% right now. While this isn’t the highest percentage among the names on this list, it may be worth noting if SELB is one of the penny stocks you’re watching right now.
Protalix BioTherapeutics Inc. (NYSE: PLX)
Unlike Selecta, Protalix hasn’t faired well during 2021. This is likely one of the reasons why short interest has accumulated in the market. The company has focused on advancing its ProCellEx plant cell-based protein expressions system. Specifically, the system is used for helping develop specific pipeline treatments. Its PRX-102, for instance, is currently in development for treating Fabry disease. Other candidates include PRX-110 in treating human respiratory diseases and PRX-115 in treating refractory gout.
Recent PLX Stock News
PRX-102 has been the main point of interest lately. In its last quarterly report, management highlighted its regulatory path for the treatment candidate. Protalix emphasized it made progress with both the FDA and European Medicines Agency. This helped establish a pathway for resubmitting a Biologics License Application for the treatment candidate. Earlier this year, the company received a complete response letter from the FDA, resulting in a sell-off.
Is PLX A Short Squeeze Penny Stock?
With a potential path forward, interest has grown heading into the end of the year. As far as PLX and short squeezes are concerned, Fintel’s data shows a short float percentage of roughly 18% right now.
Spruce Biosciences (NASDAQ: SPRB)
Spruce is one of the examples of what can happen when it comes to penny stocks with lower floats. With an outstanding share count of fewer than 25 million and some outlets showing a float of less than 5 million, this has made for a volatile market when it comes to SPRB stock. This month, that was demonstrated when shares surged from under $3 to more than $5.75 within a single day. This came just a few weeks after the company’s sponsored study appeared on the clinical trials website.
Recent SPRB Stock News
Titled “A Phase 2 Study to Evaluate the Safety, PL, and Exploratory PD of Tildacerfont in Children With CAH,” the market started taking notice. Spruce is also developing tildacerfont for women suffering from a rare form of polycystic ovary syndrome (PCOS) with primary adrenal androgen excess. Following the analysts from Benchmark initiated coverage with a speculative Buy rating and a price target of $7. Oppenheimer also started SPRB with an Outperform and a $15 target.
Is SPRB A Short Squeeze Penny Stock?
With a short float percentage of 12.92%, SPRB doesn’t have the highest figure. However, given the size of its float and the prior breakout trend, it could be something that traders have noted after last week’s spike.
Tellurian Inc. (NYSE: TELL)
With a hopeful reopening sooner than later, energy stocks have come back into focus. Today, US President Joe Biden spoke on addressing surging virus cases. This could spark sentiment-based waves across different areas of the market. Energy, as a whole, may be one of these areas, and Tellurian could be a company on the radar right now. The company has a portfolio of natural gas production, liquified natural gas (LNG) marketing, and infrastructure assets. Considering that there’s a focus on lower-carbon energy resources, LNG has become known as a “bridge fuel” during this dynamic shift toward renewables.
Recent TELL Stock News
Following a sell-off triggered by a $50 million offering last month, TELL stock seems to have leveled out during the mid-December sessions. Tellurian’s use of proceeds, among other things, included the “potential acquisition of upstream assets,” which appears to have come back into focus during year-end trading.
Is TELL A Short Squeeze Penny Stock?
TELL stock is back at a familiar area on its chart. The last time shares traded at these levels was in August. The stock slumped slightly lower but ultimately managed to bounce during the following months. Whether or not that will be the case this time around is to be seen. Regardless, TELL data shows a short float percentage of 14.76% right now. Is it one of the short squeeze stocks to watch or something to avoid for now?
Looking For Short Squeeze Penny Stocks To Buy?
These are just a handful of penny stocks with higher short interest. The important thing to keep in mind is that volatility must also get factored in if you’re hunting for data like this. If a squeeze is triggered, the resulting move in the market can happen just as quickly to the downside as the upside.
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