Assuming the overall stock market remains channel-bound, penny stocks have quickly become the go-to for a bit more alpha. As they say, where there’s volatility, there’s an opportunity, and even the slightest move in cheap stocks can equate to significant percentage changes. We all hope that these percentage changes go in our favor. But if you’ve traded long enough, you know this is where things can get tricky.
Since penny stocks – stocks under $5 – can shift without experiencing a significant price move, the breakouts and breakdowns come quickly. Throw in other market metrics like higher short interest or lower public floats, and the volatility can be rapidly amplified. This brings us to today’s article and a deeper look at some low-float penny stocks.
The idea is that the lower the float, the fewer shares there are trading in public hands. That means lower supply, and when there’s higher demand, well, you’ve got the classic economic situation of higher prices quickly. The opposite holds when selling is more prevalent than buying. Low-float penny stocks are on the radar thanks to the big move from Blue Hat Interactive Entertainment (NASDAQ: BHAT).
We discussed BHAT stock in detail yesterday as the company announced the termination of its previously proposed shelf takedown offering. Since then, a mix of a bullish catalyst like news and a risk-on appetite from day traders gave BHAT stock an overnight boost of more than 350%.
Low Float Penny Stocks To Watch
- Visionary Education Tech Holdings (NASDAQ: VEDU)
- ToughBuilt Industries Inc. (NASDAQ: TBLT)
- China Jo-Jo Drugstores (NASDAQ: CJJD)
- E-Home Household Service Holdings (NASDAQ: EJH)
Visionary Education Tech Holdings (NASDAQ:VEDU)
Visionary Education is on this list of penny stocks to watch with a float of fewer than 10 million shares and an outstanding share count below 42 million. The company specializes in providing private education resources to students.
Learning systems have gained in popularity following their popularity during the pandemic. Students and educators found that technology could be a substantial asset in reaching more people. Like many low float penny stocks, we’re dealing with small companies, and with that comes a relative lack of information at times. Visionary is one of these to fit the mold. It hasn’t announced anything since closing a public offering earlier this quarter.
However, with the low float trend triggering breakouts in penny stocks today, it could be on a few watchlists this week.
ToughBuilt Industries Inc. (NASDAQ:TBLT)
ToughBuilt Industries is another company gaining attention in the stock market today. If you buy tools or do-it-yourself construction equipment, the chances are that you’ve heard of this company. As far as the stock market is concerned, TBLT stock hasn’t had the greatest success with keeping up appearances. It effected a 1 for 150 reverse split to regain Nasdaq compliance. Right after the reverse went live, TBLT stock jumped to highs of $20. This week it sits below $2 as trading volumes have picked up.
Thanks to solid sales growth during the first quarter, the market has a bit more optimism as the Q2 earnings season begins. Last quarter, ToughBuilt reported $17.2 million in revenue, up from $12.30 million the prior year. Michael Panosian, ToughBuilt’s CEO, also mentioned, “We closed the first quarter of 2022 with revenues of $17.2 million, in line with our expectations. This represents a 40% increase over the first quarter of 2021. Our current product lines and our newly launched innovations continue to enjoy significant traction with our retailer partners and end-users.”
This year the company hopes to launch “five to ten” new product lines and continue expanding its global distribution.
With most outlets showing a float of fewer than 10 million shares right now, post-split and following recent capital raises, TBLT could be on the list of penny stocks to watch.
China Jo-Jo Drugstores (NASDAQ:CJJD)
Like Visionary, China Jo-Jo has been relatively quiet on the press wires. In fact, nothing has been reported since late April. However, some speculation surrounding Chinese companies listed in the U.S. has acted as a recent catalyst.
Earlier this quarter, Chinese regulators were finishing a probe into certain companies in preparation to weigh in on the future of dual listing options. Due to questionable business practices, the country’s major tech companies’ futures were uncertain over the last few months. However, the latest from Beijing was that things could be easing. As a result, traders looking to capitalize on more volatile, globally-focused names shifted their attention to cheaper Chinese names.
China Jo-Jo is an online and offline retailer and wholesaler of pharmaceuticals and healthcare products. It operates an online pharmacy and retail drugstores offering everything from consultations to treatment options. However, the company went silent after it announced regaining compliance with the NASDAQ. Today’s sporadic activity could be a move in sympathy with other low-float penny stocks. According to most outlets, the CJJD float sits below 5 million.
E-Home Household Service Holdings (NASDAQ:EJH)
Another Chinese penny stock with a lower float to watch this week is E-Home Household Service Holdings. The company’s stock price has gotten demolished. But the inherent volatility, thanks to a float of less than 20 million, has made it a frequent favorite for day traders.
The company provides household services in China, including property cleaning, technical work, and even nanny services. Earlier this month, it was awarded a property cleaning contract worth roughly $268,7208 USD (RMB 18 million) in April and May. According to E-Home, the contracted service period ranges from 12-25 months.
Thanks to today’s trend in low float and China-based penny stocks, EJH stock could be one of the names to know heading into the end of the week.
What To Know About Buying Low Float Penny Stocks
It’s important to understand that low-float penny stocks are some of the highest risk of the bunch. Other than the general profile of penny stocks, volatility and price risk can get amplified when the float is low. Therefore, having a set strategy, profit targets outlined, and stop losses set is a good idea.