Can you handle risk? Do you like volatility? If you answered yes to either question, then penny stocks are probably something to watch. These low-priced equities have become a go-to for profit hunters looking for quick gains. But those gains come with plenty of risks. Just as quickly as they rise, they can crumble, and in many cases, the drop hurts more if you’re on the wrong side of a losing trade. So how do you find the best penny stocks to buy?
Penny Stocks TL;DR Summary
- Penny stocks are high-risk and high-reward
- Learning how to find the best penny stocks to buy takes time
- Certain market trends can help when it comes to building your watch list
- One of the top trends in the stock market today involves stocks with higher levels of short interest based on the potential of a short squeeze triggering
- We look at a handlful of these “short squeze stocks” in today’s article
One of the ways to start is by looking at different stock market trends. This might be something like we saw last week with low-float penny stocks. This week, it seems another theme has taken shape. Stocks with higher levels of short interest are in the spotlight. Thanks to the big breakouts from stocks like AMC, GameStop (NYSE: GME), and many others, traders hunt for the next big squeeze.
Today we look at a few penny stocks that can be bought for under $5 right now. However, just because they’re “cheap,” that doesn’t guarantee they’re worth the risk. That is something you can decide after reading the fine details.
Short Squeeze Penny Stocks To Watch
|1. Future Fintech Group, Inc. (NASDAQ: FTFT)|
|2. Spruce Biosciences (NASDAQ: SPRB)|
|3. Sino-Global Shipping America, Ltd. (NASDAQ: SINO)|
|4. NXT-ID Inc. (NASDAQ: NXTD)|
1. Future Fintech Group, Inc.
One of the hottest areas of the stock market today is cryptocurrency and digital assets. When Bitcoin boomed a few years ago, speculation ultimately fueled one of the most significant moves of any asset in history. The resurgence of that same speculation has fostered an entirely new evolution of the DeFi movement. Whether it’s new coins, non-fungible tokens (NFTs), different iterations of blockchain technology, or anything in between, there’s no denying that it has helped shape the next generation of investors.
Future Fintech is leveraging this interest through its blockchain- and crypto-based business. Not only has it recently signed a JV to build a crypto mining farm, but Future Fintech has also taken steps to develop its own metaverse. Earlier this month, it signed a letter of intent with Faya Digital Technology.
The two plan on establishing a metaverse research and operations platform. That will also include creating NFT avatar products and three blockchain games. Faya already has a metaverse ecosystem project with over 1 million dapp users, CITY. It also has a blockchain game ecosystem with 570 thousand active game users, DO.
FTFT Short Interest
Looking at data from Fintel.io, you’ll see that the current short float percentage on FTFT stock is around 7.66%.
2. Spruce Biosciences
Spruce Biosciences is one of the penny stocks we talked about last week. The company has been in the spotlight most recently after gaining the attention of analysts at Oppenheimer. The firm initiated coverage with an Outperform rating and a $15 price target just after details emerged on a patent trial case related to its tildacerfont. The company won its case, which ultimately reflected favorably on its congenital adrenal hyperplasia treatment candidate.
In addition, a sponsored study titled “A Phase 2 Study to Evaluate the Safety, PK, and Exploratory PD of Tildacerfont in Children With CAH” was posted to the Clinical Trials website. The critical piece of information being looked at is the trial’s start date: December 2021. No further details have emerged, but with that being the proposed start date, it seems like speculation has begun playing a role.
SPRB Short Interest
SPRB stock has a higher level of short interest than FTFT. According to Fintel data, the short float percentage sits at nearly 13% right now.
3. Sino-Global Shipping America, Ltd.
Sticking with the cryptocurrency trend, Sino-Global is another one of the penny stocks to watch with higher short interest. While the name doesn’t do it justice, recent company developments place this shipping stock right in the middle of the digital revolution.
Sino announced earlier this quarter that it would develop bitcoin mining machines via its newest joint-venture. Along with Highsharp, the companies will develop and commercialize Thor as a new bitcoin mining rig. Highsharp’s role will be exclusively supplying computing chips for the joint venture.
In line with this new directive, the company has also initiated a succession plan for the CEO position. Effective November 1, former VP Yang “Leo” Jie succeeded former CEO Lei Cao to speed up the growth of Sino’s crypto projects. Considering the turnaround in the price of Bitcoin and other digital assets, crypto stocks could be some of the ones to watch heading into the new year.
SINO Short Interest
If you look at data from Fintel, you’ll see that the current short float percentage on SINO stock is around 7.88%.
4. NXT-ID Inc.
NXT-ID has been in a strong uptrend for the last three days. The company’s emergency response technology platform has garnered the most recent attention following a new contract with the U.S. General Services Administration. The contract details entail NXT-ID bringing its personal emergency response systems (PERS) to local, state, and federal government purchasers. Partners like the Veterans Health Administration will not have access to NXT-ID’s technology. The PERS are mainly used by the 65+ demographic and can be used to notify caretakers or emergency service providers in the event of an accident.
However, the latest attention seems to have originated from the stock’s short interest.
NXTD Short Interest
According to Fintel data, the short float percentage for NXTD stock is just shy of 13.5% right now.
Final Thoughts On Short Squeeze Stocks
When it comes to penny stocks with high short interest, the apparent goal is to find one that squeezes. There aren’t any guarantees that will happen, but if it does, you want to be ready. That means understanding how to trade penny stocks with high volatility. Have a clear plan in place and your profit targets laid out. If a squeeze happens, it can come quickly and end just as fast.
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