You can make a lot of money with penny stocks if you know what you’re doing. These stocks under $5 are well known for their big moves in the stock market. Today we’re going to take it a step further. We look at some of the most volatile of the bunch: low float penny stocks.
First, what is “float,” and why does it matter? The float or “public float” is the number of shares actively trading in retail hands daily. This figure will be less than or equal to the Outstanding Share count (but is typically less).
It doesn’t account for any restricted shares or shares that haven’t been registered. It’s the pure reflection of what’s readily accessible to retail traders. The figure can also fluctuate depending on when new shares enter the market. These new shares can come from things like company financings, employee stock plans, and the like.
Why does float matter? It may or may not depend on your trading or investing style. However, if the float is something you’re searching for, it becomes essential when above-average activity is present. In particular, low-float penny stocks have fewer shares floating around in public hands. Therefore, there is a lower supply, and during times of higher demand, these stocks can dramatically fluctuate in price.
Low Float Penny Stocks To Watch
In many cases, an explosive move to the upside can occur quickly. While it might not last very long, it does offer high volatility traders the chance to capitalize on this phenomenon. Take Maris Tech Ltd. (NASDAQ: MTEK), for example. In the stock market today, MTEK stock exploded from under $1.20 during premarket hours to highs of $2.09 by the mid-morning session. That’s a move of more than 74% within a few hours. If you look at MTEK stock by the end of the morning session, its price has dramatically dipped from those $2.09 highs to below $1.60, a drop of more than 20%.
You can see that low float penny stocks have inherent volatility. As such, if you’re looking for names to add to your watch list, it is important to understand the market dynamics that might be at work.
- Blue Hat Interactive (NASDAQ: BHAT)
- Blue Apron Holdings (NYSE: APRN)
- HTG Molecular Diagnostics (NASDAQ: HTGM)
- Integrated Media Technology Limited (NASDAQ: IMTE)
Blue Hat Interactive (NASDAQ: BHAT)
The BHAT stock float sits below 10 million shares and has lent itself to some big moves in the market. Recently, shares of the augmented reality entertainment company came into the spotlight after it terminated a previously proposed offering. The news was seen as a big win for traders as this put pause to any potential dilution that would’ve resulted from such an offering.
As discussed above, low float penny stocks thrive on as few shares in the market as possible. When companies raise money through stock offerings, they’re usually done at a discount and could add millions of new shares to the market when the funds sell shares to recoup their investment & make a return. In this case, Blue Hat’s cancelation of the potential offering was assumed to have removed the instance where dilution risk plays a role (for now).
Blue Hat is no stranger to raising money and the last few months of downtrend show how that can impact a stock. The company conducted a 1-for-10 reverse stock split last quarter to maintain its minimum price requirement and remain listed on the Nasdaq.
Blue Apron Holdings (NYSE: APRN)
Meal prep company Blue Apron has been in the spotlight recently thanks to attention on both low float and short squeeze penny stocks. Last week we discussed APRN stock as it continued its latest multi-week uptrend. One of the critical catalysts at play was evidence of higher short interest. According to data from Fintel.IO and TDAmeritrade, the short float on the meal-kit stock sits between 27.89% and 31.79%.
Besides the technical play on APRN stock, the company has made strides to enhance its business model. Blue Apron introduced some seasonal offerings that seemed to have struck a positive chord. Meanwhile, the company’s presentation at the Jun 22nd East Coast IDEAS Investor Conference gave traders a bit more bullish confidence.
The company has made strides to enhance its operations with strategic growth plans. Blue Apron outlined plans to drive consumer momentum through targeted marketing spend and customized add-ons at its inaugural Investor Day in May.
CEO Linda Findley explained, “The next phase of our strategy, which we have titled The Next Course, will be focused on delivering long-term sustainable growth and sets our sights on profitability at the adjusted EBITDA level in 2023. It also positions our ESG programs as an enabler of our long-term ambitions, simultaneously driving accountability to the environment, customer growth and employee engagement.”
While it isn’t the lowest float on the list of penny stocks, the APRN stock float is still lower than many others, overall, sitting at less than 20 million.
HTG Molecular Diagnostics (NASDAQ: HTGM)
One of the top penny stocks to watch heading into July was HTG Molecular. In our article Best Penny Stocks For July 2022? 5 To Watch Right Now, we detailed some of the high points traders focused on. In particular, HTG’s presentation circuit has helped it gain some momentum. The company posted abstracts showcasing its HTG EdgeSeq diagnostic technology and presented a keynote featuring one of its customers at the MarketsandMarkets Biomarker and Companion Diagnostics Conference.
An article published in Frontiers in Medicine highlighted the clinical potential of HTG’s HTG Transcriptome Panel. In particular, analysis using the HTP for mRNA expression profiling was “able to assist in identifying multiple molecular and histological subtypes.” According to the company, this has “important implications” for therapy selection in a specific heterogeneous group.
In addition, a notice of its annual meeting was submitted this week regarding several things up for shareholder approval. One focus point is a proposed reverse stock split at a ratio between 1:5 and 1:15. While the market awaits the meeting, traders are looking at HTGM as one of the low float penny stocks to watch. Most financial outlets will show this figure sitting below 10 million shares.
Integrated Media Technology Limited (NASDAQ: IMTE)
Another one of the penny stocks that was no stranger to massive volatility in the stock market is Integrated Media. If you look at its stock chart from the beginning of the year, it seems like the worst (or most exciting) roller coaster in history. The price of IMTE stock has rallied s high as $38.48 and as low as $2.16. The jumps and drops aren’t slow or steady either.
For example, the move from around $5.60 to $38.48 came within a month. The move down from $38.48 to below $5 took about2.5 weeks. Probably the most dramatic example of how low float penny stocks can take a turn for the worse was back in June when the penny stock fell from highs of $13.11 to lows of $3.60 within a single session.
Now that you understand some technical backstories, what is Integrated Media? The company sells nano-coated plates for filters. It also manufactures electronic glass and even Halal products and digital assets. No major news has been released this month. However, an update at the start of June seems to have begun gaining more attention recently.
Integrated Media signed a memorandum of understanding for developing a sourcing channel for Halal products in Thailand. This deal aims to establish a strategic partnership to establish standards, inspection, and certification of Halal affairs, among other things. CEO Xiaodong Zhang further explained that “This MOU lays the foundation for sourcing an array of Halal products to our European distributors and will boosted our Halal business in Southeast Asia and the world.”
With fewer than 20 million shares in the float and outstanding, IMTE has also joined the list of low float penny stocks to watch.