Short squeeze penny stocks are growing in popularity as the stock market attempts to recover. The simple idea is that if the market is turning bullish, all of the beaten-down names could have large short positions in them.
The larger the short, the higher the potential for a squeeze, or so some think. Whether or not that becomes the case is secondary to the speculative nature of traders in the stock market today. Today we look at a few penny stocks with higher short interest, what the companies are up to, and you can decide if they are worth a closer look.
Penny Stocks To Buy [or avoid]
Are short squeeze penny stocks a buy or should you avoid them entirely? There are a few schools of thought to this. First, when a short squeeze triggers, it can be a highly volatile situation for a stock. They can jump significantly higher in a very limited period. These stocks can also crumble just as quickly.
That’s why if you choose to trade stocks with higher short interest, you understand how volatility works and know your risk tolerance. Can penny stocks like these be worth it? Of course, but if you don’t have the stomach for wild moves in the market or don’t quite understand the dynamics of a squeeze, the risks may far-outweigh any potential reward.
In this list of penny stocks, we take a look at stocks with hefty short interest. Many have gotten beaten down in the market this year. Are they due for a squeeze if the stock market continues bouncing?
Pennsylvania Real Estate Investment Trust (NYSE: PEI)
Real Estate Investment Trusts – REITs – are starting to gain some attention in the stock market as rates rise. This has companies like Pennsylvania Real Estate Investment Trust on the radar after months of selling pressure took it lower. Earlier this week, PEI stock hit fresh 52-week lows of $3.31. But since then, shares have made a rebound on the back of news.
Pennsylvania Real Estate Investment Trust closed the sale of its interest in Gloucester Premium Outlets and reduced its debt by $35.4 million. The company has made a point to lean out its operations and free up capital. Joseph F. Coradino, Chairman and CEO of PREIT even mentioned that in a recent update.
“We continue to seek creative ways to harvest capital throughout our optimally-located platform…We are intently focused on reducing debt, improving our balance sheet and executing on meaningful transactions in the near-term as we plan to exercise the one-year extension of our credit facility.”
The deal’s closing comes just a few days after Pennsylvania REIT sold an 11-property outparcel portfolio to Four Corners Property Trust for $32.5 million.
On top of this, PEI stock’s short interest has come into focus. According to data from TD Ameritrade, the current short interest % float sits at 22.4%.
Arcimoto Inc. (NASDAQ: FUV)
Electric vehicle stocks have also come into focus amid the rise in energy prices and record gas prices. While it hasn’t been as aggressive as other high-cost commodities like food, the energy crunch has put pressure on consumers especially when it comes to travel and shipping.
Arcimoto is developing a suite of electric vehicles to “move people and stuff” daily. Its three-wheel platform is used in Arcimoto’s applications servicing consumers and specialty vehicles used in emergency response, local delivery, and daily driving.
The company recently launched EV financing through FreedomRoad Financial. This dealer financing option opens up more opportunities to gain more customers in the long run or so they hope. In its first quarter, Arcimoto missed earnings per share estimates and came in very shy of sales expectations. Wall Street anticipated over $1.3 million in sales but Arcimoto only reported $650,000.
This failure to meet the mark may be one of the reasons for higher short interest. Right now, according to Fintel.IO, the short float percentage on FUV stock is 41.22%. With that, some traders have put this on the short squeeze watch list heading into the end of the quarter.
Amyris Inc. (NASDAQ: AMRS)
Shares of Amyris Inc. could be on the radar for traders as the month of June winds down. There’s been a strong support for small- and micro-cap biotech penny stocks recently. This could be due, in part, to a general bullishness in the overall markets. Biotech is highly speculative and in a risk-on environment, tends to react bullishly. When there’s more of a risk-off condition, biotech isn’t usually in favor.[Read More] Penny Stocks To Buy Now? 4 Biotech Stocks To Watch Before July 2022
Amyris has gained significant momentum this week. It specializes in synthetic biotechnology through its Lab-to-Market platform. Many of its ingredients are used in consumer products targeting the “clean” health, beauty, flavors, and fragrances markets. What’s more, a recent coverage initiation by analysts at JP Morgan has brought some attention to the company. JP Morgan started Amyris with a Neutral rating.
JP Morgan joins other analysts including Piper Sandler who recently initiated coverage. It also has a Neutral rating but paired it with a $2.50 price target. As far as short interest is concerned, Fintel.IO shows a 22.64% short float percentage heading into next week.
Are Penny Stocks Good For You?
If you’re an investor, penny stocks might be a bit more volatile than you like. However, day traders are typically well-equipped for such wild price changes. That said, whether you’re investing in penny stocks, day trading them, or something else, the goal is to make money. If you have a plan and strategy to do that with penny stocks, then they may just be a “good” option for you,