Do you want to find penny stocks to buy? If you know what you’re looking for, putting together a strong list of stocks to watch is easy. Whether you’re looking for the most active names, higher volume stocks, or something else, a theme is an excellent thing to have when you begin. Today’s article takes a closer look at a handful of active penny stocks today that have experienced unusually high levels of options trading.
Penny Stocks To Watch
- Applied DNA Sciences (NASDAQ: APDN)
- Sonder Holdings Inc. (NASDAQ: SOND)
- Party City HoldCo Inc. (NYSE: PRTY)
- Aeglea BioTherapeutics (NASDAQ: AGLE)
Applied DNA Sciences (NASDAQ: APDN)
First, it was covid. Now it seems to be monkeypox dominating the viral threat headlines. With that has come a slew of monkeypox stocks to watch this summer. Applied DNA has worked on remaining relevant over the last few years amid these viral threats and it isn’t developing a cure or treatment either. Applied DNA focuses on something that could be far more frequently used. It creates PCR tests.
Its subsidiary, Applied DNA Clinical Labs, recently submitted a validation package for its monkeypox virus test to the New York State Department of health. Commenting on the update, Dr. James A. Hayward, president and CEO of Applied DNA, explained, “Our pursuit of monkeypox testing via LDT combines what we believe to be the quickest regulatory path for diagnostic approval with our proven ability to deliver short turnaround time-to-results that, as COVID-19 has taught us, can help contain virus spread.”
APDN Stock Options Action
With this, APDN stock has come into focus once again after an already wild last few weeks. The bullishness was also echoed in the options market as well. Today we see a considerably higher volume in the September 16th $5 and $7.50 Call contracts.
Sonder Holdings Inc. (NASDAQ: SOND)
Options action has helped keep Sonder Holdings on the list of penny stocks to watch. A little over a week ago, SOND stock was on another watch list involving options activity. The company provides hospitality technology and designs unique experiences for guest accommodations.
Thanks to its latest round of earnings that showed a sales beat, traders have followed its progress—analysts, including Oppenheimer, adjusted price targets and remained bullish in their ratings. The firm has an Outperform on Sonder and boosted its $3.75 target to $4 last week. In the company’s earnings call, CFO Sanjay Banker said, “…regarding our outlook in the third quarter of 2022, we anticipate revenue of better than $120 million representing more than 78% year-over-year growth versus $67 million in the third quarter of 2021…We continue to expect to grow full year revenue by between 100% to 110% as compared to full year 2021. We expect free cash flow in Q3 of approximately negative $45 million before a one-time restructuring cost. For the second half of the year, Q3 and Q4 combined, we are reaffirming free cash flow of better than negative $70 million before one-time restructuring costs.”
SOND Stock Options Action
SOND options remain a focus this week. In particular, more than 9,000 contracts were traded at the December 16th $5 Calls as of this article. The current Open Interest for this option is more than 12,400.
Party City HoldCo Inc. (NYSE: PRTY)
Retail stocks continue grinding this week following strong results from larger cap cohorts like Walmart. While Party City isn’t a grocery store, it is a popular outlet for celebrations as we approach the Halloween season.
Following an earnings beat for the second quarter, shares of PRTY stock continue gaining traction. The company missed slightly on sales estimates but remains optimistic about the year expecting $2.15 to $2.225 billion in 2022. There is also a plan to launch 85-100 new Next Generation stores this year in addition to new openings and remodels.
Brad Weston, Chief Executive Officer of Party City, stated, “Our second quarter topline results were largely as expected as we lapped a strong Q2 last year while cost headwinds, which are predominantly transitory in nature, pressured profitability. We are seeing benefits from the transformation work we have accomplished over the last 2 years, which is evidenced by our strong sales results compared to pre-pandemic levels.”
PRTY Stock Options Action
Today there was a high level of Call volume compared to Puts across most expiration dates. In particular, the September 16th $2.50 strike saw over 600 contracts traded compared to 0 Open Interest.
Aeglea BioTherapeutics (NASDAQ: AGLE)
With another day of higher-than-average trading action, Aeglea BioTherapeutics has continued turning heads. The company made a late afternoon announcement on Thursday that prompted a strong overnight move.
Aeglea reported that the European Medicines Agency gave validation of a Marketing Authorization Application for its pegzilarginase in treating Arginase 1 deficiency. The EMA also granted it Orphan Drug Designation.
Anthony G. Quinn, M.B., Ch.B., Ph.D., president and chief executive officer of Aeglea, explained, “We are thrilled with the progress being made with the validation of the MAA and look forward to continuing to work with and support our partner Immedica throughout the EMA review process.”
AGLE Stock Options Action
A look at the AGLE options chain shows some interesting activity in the September 16th Calls. Specifically, the $2.50 strike has over 900 contracts traded compared to 0 contracts of Open Interest.
Final Thoughts On Using Options Volume To Find Penny Stocks
Like all other data points, options activity should be one piece of your more extensive due diligence process. That’s because the volume doesn’t paint the whole picture. You can have high Call volume, but selling volume may create “unusual” levels. That’s the same for high Put volume.
Advanced strategies include spreads and multi-leg options involving buying and selling multiple strikes on both sides of the options chain. Nevertheless, if unusual activity is something you like to know about, it can be used as an excellent first step and paired with other market factors to help you decide on penny stocks to buy or completely avoid.