Best Penny Stocks To Buy
Social sentiment has become a major factor in finding the best penny stocks to buy. In the past, whatever people on Reddit, Twitter, Facebook, or even Discord were saying was taken with a grain of salt. Who pays attention to retail traders, right? The rise of “The Ape Army” and a surge in stocks like AMC and GME stock shed a bright light on an area of the market that was severely underserved. Fast-forward to 2022, and Wall Street is paying attention to the voice of the retail trader.
Searching for hot penny stocks on Reddit is as common as hunting for stocks hitting new intraday highs. It all boils down to data. How many mentions, how many upvotes or downvotes, and how influential are the ones Tweeting or commenting? These are all slight nuances to this strategy.
Penny Stocks To Watch
This article looks at a handful of popular penny stocks on Reddit that have also received a vote of confidence from options traders (or have they). Unusual options volume has been used to gauge sentiment. Much like social mentions, there’s more to it than associating ‘high volume’ with a buy or sell. For the most part, using things like social sentiment and options activity should be one portion of your research. Now let’s see if any of the names on this list of penny stocks warrant a place on your watch list in August.
- FuboTV Inc. (NYSE: FUBO)
- Amarin Corp. (NASDAQ: AMRN)
- Canoo Inc. (NASDAQ: GOEV)
- Endo International Inc. (NASDAQ: ENDP)
- Senseonics Holdings Inc. (NYSEAMERICAN: SENS)
FuboTV Inc. (NYSE: FUBO)
Streaming entertainment stocks have been hot and cold this year. The Netflix dump after earnings in April didn’t help sentiment. However, it and others, including Disney, have made a more robust rebound in recent weeks. This has put some attention on smaller streaming companies as earnings season rolls on.
FuboTV specializes in sports live streaming. There’s also a wagering component, bringing the appeal of sports betting directly to live events. With operations in the U.S., Canada, France, and Spain, Fubo has managed to expand its footprint globally. This week could be an important one for the company as well. Tomorrow (8/4), it reports second quarter results, which could dictate the pace of the rest of the year.
The first quarter saw FuboTV hit $236.7 million in sales and end it with $456 million in cash. Based on the latest options action, it may appear traders are taking a bullish stance on FUBO stock ahead of earnings. That’s because of the very near-term activity in the stock market today. Specifically, the FUBO $3 strike call options have seen nearly 30,000 contracts traded today compared to just 6,788 Open Interest contracts.
Of course, the volume doesn’t reveal the whole story as in “selling to open” as you would with shorting a stock, which also factors into that figure. Regardless, on the surface, some have taken this as a sign of strength heading into FUBO stock earnings results this week.
Amarin Corp. (NASDAQ: AMRN)
Speaking of penny stocks that have fallen this year, Amarin Corp. has hovered around its 52-week low levels since it dropped in May. The main reason for the topple-over came after its last round of earnings and comments that it would suspend revenue guidance for the year. Earnings also came in short of expectations as sales missed the mark of analysts.
What has helped breathe some new life back into AMRN stock is exactly what hurt it earlier this year. Amarin reported Q2 results and gave a business update. While it continues suspending revenue guidance, management did dive into details of its prospects for the year ahead.
“We remain on track to deliver on our commitment to obtain reimbursement status in up to eight European markets and launch in up to six key European markets this year and remain confident in our greater than $1 billion revenue opportunity in Europe…we remain committed to maximizing the value of VASCEPA/VAZKEPA by maintaining our strong presence at future medical meetings and supporting potential publications, which will continue to highlight the strength of this data and impact for patients,” explained Amarin CEO Karim Mikhail.
Amarin develops platforms for cardiovascular disease management. Its VASCEPA®/VAZKEPA® platforms are designed to reduce major cardiovascular events and related costs.
This week saw a pop in Call options trading for the September 16th expiration. The $2, $4, and $5 strikes have thousands of contracts Open, with the $2 strike experiencing the highest one-day volume on Wednesday.
Canoo Inc. (NASDAQ: GOEV)
Electric vehicle company Canoo Inc. is on the list of penny stocks to watch with unusual options volume today. The company develops mobility solutions servicing consumer and commercial markets. Major organizations, including the US Army, NASDA, and Walmart, are among the more recent names working with the company. Meanwhile, Scott Painter, CEO of EV subscription company, Autonomy, was quoted in a Tweet committing to ordering 23,000 EVs, including ones from Canoo.
This month could be a big one for the company as well. August 8th is when Canoo reports its next round of earnings. For now, options traders are placing their bets on GOEV stock. The September 2nd $5 strike Calls caught a bump in action. More than 11,000 contracts were traded at the time of this update.
Meanwhile, there was only 42 Open. Is this foreshadowing of next week’s results or simply a hedge by short traders who anticipate something different? Fintel.IO’s short data shows that 29.48% of the float is short.
Endo International Inc. (NASDAQ: ENDP)
Since the overturn of Roe v Wade, reproductive health stocks have been a focus. Endo International has a subsidiary, Paladin Labs. It has established a suite of brands, either acquired or in-licensed, for the Canadian market, and one of these brands is Plan-B.
Endo also secured a deal with Quoin Pharmaceuticals (NASDAQ: QNRX) to develop, register, supply, and commercialize QRX003 in Canada. It’s Quoin’s product candidate for Netherton syndrome and something we dove deeper on in this article: Best Penny Stocks To Buy Right Now? 4 To Watch Under $1.
Among other highlights, something that has attracted the attention of traders recently is the list of significant investments in the company. For example, BlackRock Inc. reported a 7.9% stake in July. Meanwhile, Millennium Management reported a position of over 4 million shares at the end of June.
What do options traders think about ENDP stock? Right now, the August 19th $1 Calls are in focus. Just under 9,000 contracts had traded compared to more than 10,000 open. Whether or not this is a bullish bet on the prospects of the reproductive health debate or not is to be seen. In any case, big money investments and stock market speculation have sparked momentum in recent sessions.
Senseonics Holdings Inc. (NYSEAMERICAN: SENS)
This section is an update to the previous 4 names on this list of penny stocks. Senseonics saw a pop in options volume later in the Wednesday session as momentum built after some news surfaced. First, what did Senseonics announce?
The company reported that Anthem (now Elevance Health) is offering coverage for Senseonics’ implantable continuous glucose monitoring system, including its Eversense platform. The decision adds more than 45 million lives and sees Anthem joining a growing list of payers granting access to the Eversense CGM platform.
Tim Goodnow, Ph.D., President and Chief Executive Officer of Senseonics explained, “Eversense provides patients with actionable glucose data, enabling users to proactively manage their glucose levels. With its six month sensor life, sustained accuracy, on-body vibratory alerts and remote monitoring capability, Eversense E3 offers patients an advanced CGM to help effectively manage their diabetes and experience healthier outcomes.”
What do options traders think about SENS stock? Both the August and September expirations are showing higher volume and open interest. For example, more than 8,000 contracts traded at the $1.50 and $2 strikes for August 19th. If you look at the September expiration, The $2 strike shows more than double the volume compared to open interest so far, on Wednesday.