Penny stocks are red hot right now if you know where to look. The overall market has gotten beaten up due to concerns over high inflation and expectations of a recession in 2022. But some have found resolve in day trading or swing trading stocks instead of taking a long-term approach to the stock market (for now). Thanks to this trend, we’re seeing new activity and attention focus on certain types of stocks. Today we look at a handful of penny stocks with high short interest.
The appeal comes thanks to the breakout potential that many of these types of trades have offered. Most notably, AMC Entertainment (NYSE: AMC) and GameStop (NYSE: GME) have made their market in the investing community. Their epic short squeezes and resulting breakouts were the stuff of legend.
Now, the hunt is on for the next round of short-interest penny stocks. How do you identify these in the first place? The list should begin with companies with higher short interest based on short float percentage.
Short Squeeze Penny Stocks
Short squeeze penny stocks can be very exciting to watch. But if you’re inexperienced in trading higher volatility names, they can do more harm than good for your portfolio. That’s because the market dynamics tend to lend themselves to short-term, high-intensity moves. Some might last a few days. However, the vast majority tend to occur within a much shorter period. When finding penny stocks to buy with higher short interest, you need to ask yourself if they truly are worth the risk or if you should avoid them entirely.
1. Catalyst Biosciences Inc. (NASDAQ: CBIO)
Shares of Catalyst Biosciences have traded higher for the majority of June. The initial move started after the biotech company inked an asset purchase deal with Vertex Pharmaceuticals (NASDAQ: VRTX) to sell its portfolio of protease medicines, for $60 million. In the meantime, Catalyst management tried to enforce its stance on seeking strategic alternatives to monetize its existing assets further.
Nassim Usman, Ph.D., Chief Executive Officer of Catalyst Biosciences, explained, “This sale is part of the ongoing strategic process that we announced in February to explore alternatives and create value for shareholders. We have significantly reduced our cash burn and continue to work with our advisors to evaluate additional strategic alternatives for Catalyst.”
While this news was an initial catalyst, the latest short float data has become a significant point of interest. According to data from Fintel.IO, the CBIO short float sits at just over 10% right now.
2. GeoVax Labs Inc. (NASDAQ: GOVX)
Thanks to a jump in cases of monkeypox, Geo Vax Labs is on the list of monkeypox stocks to watch. In particular, GeoVax’s GV-MVA-VLPTM platform was in focus. It is used to construct vaccine candidates using genetic sequences from viruses. GeoVax’s Chief Scientific Officer, Farshad Guirakhoo, Ph.D. He discussed the company’s platform and mentioned smallpox and monkeypox specifically earlier this year.
While monkeypox speculation has been a momentum driver over the last few weeks, the short-interest could have become the latest focus. Heading into the long weekend, GOVX stock is on the radar for some who are looking at the 28.26% short float according to Fintel and the 34.63% short float percentage according to TD Ameritrade.
3. View Inc. (NASDAQ: VIEW)
Shares of View Inc. have been on fire the last few weeks, which must’ve been a great sign for anyone holding shares at the end of May. That’s because VIEW stock tanked after the company’s going concern came into question. View stated in its 10Q filing that it didn’t have adequate financial resources to fund its forecasted operating costs and would look to raise capital.
Fast-forward to this month, and VIEW stock has bounced back by more than 350%. The company announced several updates this week, including unveiling its Smart Building Cloud. It also announced that the second terminal at the DFW Airport would feature View’s Smart Glass and environmental sensors. With earnings expected next week, anticipation has grown regarding how the companies might combat its going concern issues.
Where is View as far as short interest right now? Fintel has the short float sitting just under 23%.
4. MedAvail Holdings Inc. (NASDAQ: MDVL)
Pharmacy stocks have been a mixed back over the last few weeks. However, MedAvail has become one of the top performers. Shares of MDVL stock are up more than 100% since hitting 52-week lows in March.
Since then, one of the most significant catalysts has been insider buying in the issuer. The tech-based pharmacy company gained the interest of Ally Bridge Group, which reported purchasing more than 21 million shares of MDVL stock above $1. Next week the company’s participation at the Lytham Partners Summer 2022 Investor Conference and Cowen FutureHealth Conference could be in focus.
Is MDVL a short squeeze penny stock? Compared to other names on this list, MedAvail has the lowest level of short float percentage. Right now, Fintel data shows this figure at just over 7.6%.
5. Rhythm Pharmaceuticals (NASDAQ: RYTM)
A recent FDA approval put RYTM stock on the list of high-volume stocks to watch this week. The Administration approved the biotech company’s Imcivree in patients with Bardet-Biedl syndrome. The treatment is now available for chronic weight management in patients with obesity resulting from the syndrome.
This news also came in tandem with another update regarding a deal for up to $100 million in investment from HealthCare Royalty, including a $37.5 million initial investment. According to Rhythm, the financing will be a non-dilutive event for its shares, which may have come as a surprise to traders who are used to dilutive financing in penny stocks.
Capping the week, a price target bump from Stifel analysts placed RYTM stock on the list again. The firm has a $25 target (up from $23) and reiterated a Buy rating. Regarding short interest, the RYTM short float percentage is just over 10%, according to Fintel data.