Penny stocks are shares of companies trading for less than $5 per share. They’re also some of the most volatile in the stock market today. Yet many times, when it comes to day trading trends, sympathy sentiment takes president over broader market moves.
What is sympathy sentiment? Also knowns as “sympathy trading,” this is when traders identify certain stocks for certain reasons. It might be a company making a big move related to sector-specific news. It could be stocks with specific fundamentals like lower floats or higher short interest.
It could also be things more simple, like stocks under $1, as we’ve seen in more recent sessions. Today we look at a handful of penny stocks to watch after shares of Stabilis Solutions (NASDAQ: SLNG) exploded over 100% on Wednesday morning.
Why Is SLNG Stock Up Today?
You might assume the headlines commanding retail traders’ attention have something to do with the FOMC meeting. You may be right, later on in the session. However, during the early morning, there are other things helping drive momentum. Stabilis Solutions is one of these things and Department of Energy-related news has piqued a lot of interest.
On Wednesday, Stabilis announced receipt of approval from the U.S. DOW to export domestically produced liquefied natural gas (LNG) to “all free trade and non-free trade countries,” including Europe. Thanks to an already tight energy market, this news came as a significant catalyst for SLNG stock.
“The DOE’s approval provides us with the ability to assist in the world’s current energy crisis as well as longer term capabilities to facilitate the world’s transition to cleaner energy sources,” said Westy Ballard, President & Chief Executive Officer of Stabilis, “and we look forward to working with our customers to commercialize these exciting export opportunities.”
What also helped SLNG stock explode was the higher trading volumes compared to the current public float of the energy stock. With fewer than 5 million shares in the float, the bullish buying has triggered a stampede. It’s important to understand that with low float stocks, they can implode just as quickly as they explode, and that’s what’s been seen in the stock market today.
Regardless of what happens with SLNG stock later in the session or this week, it was enough to attract the interest of retail traders looking for “the next SLNG.” That has led to a bullish trend in certain energy penny stocks, including ones specializing in LNG production and distribution.
Energy Penny Stocks To Watch
Tellurian Inc. (TELL)
Shares of Tellurian may have pulled back over the last few days, but the stock is still green since the start of the year. This is one of the names directly tied to LNG and one of the reasons for its latest dip has to do with its expansion plans.
Earlier this year, the company said it would be earmarking proceeds from a large offering toward supporting its LNG terminal build-out. This week, however, the company withdrew its proposed public offering, which brought some uncertainty to the future of this LNG project.
Not much has come about from the company since the details surfaced. However, the excitement around Stabilis’ DOE deal seems to have helped give a much-needed breath of fresh air to TELL stock. What could also have played a role in the optimism is the focus on Tellurian’s previous acquisition in July.
The company purchased natural gas assets from EnSight for $125 million, with the anticipated closing date this quarter. As September rolls on, the clock is ticking on this acquisition’s closing ceremony.
FuelCell Energy Inc. (FCEL)
Liquefied Natural Gas isn’t the main focus for FuelCell Energy but alternative fuels are. In this case, the company specializes in hydrogen production and decarbonizing power. Ever since the passage of the Inflation Reduction Act, FuelCell Energy has ben gaining momentum. That’s because the Act included investments for all fuel types including hydrogen as well as nuclear and renewable sources.
In its third quarter fiscal 2022 results, the company discussed significant revenue growth. FuelCell’s $43.1 million in Q3 revs were significantly higher than its prior year’s period of $26.8 million. It also has a backlog of more than $1.28 billion as of July 31, 2022.
“For the third quarter, we achieved our strongest quarterly revenue in five years, reflecting product sales and continued progress on our Powerhouse business strategy…We delivered Ex Works six modules to Korea Fuel Cell Co., Ltd. during the quarter, and we have completed manufacturing the eight modules needed to fulfill the order placed by Korea Fuel Cell Co., Ltd. in June 2022 and expect to deliver those modules Ex Works and recognize the resulting revenue in the fourth quarter of fiscal year 2022,” said Jason Few, President and CEO in an update earlier in September.
Thanks to the move in certain energy stocks like SLNG, FCEL could be one of the penny stocks to watch right now.
Gevo Inc. (GEVO)
Shares of Gevo stock didn’t react as bullish as TELL or FCEL stocks did. However, the clean energy fuel company saw some growing interest on the back of the SLNG stock news. Gevo recently broke ground on its first commercial-scale sustainable aviation fuel facility, Net-Zero 1.
CEO Dr. Patrick Gruber explained earlier this month, “Building production facilities like Net-Zero 1 that will use de-fossilized energy, create a business system that rewards sustainability improvements and is equitable for all parties in the value chain is important to us…we expect to see our circular economy in action, increasing the sustainability of every product we make while simultaneously reducing the impact of fossil fuels.”[Read more] 3 High Volume Penny Stocks To Watch Before FOMC Meeting
This year and prior, Gevo has managed to ink deals with large companies in commercial markets including deals with American Airlines as well as oneworld Alliance members for sustainable aviation fuel. According to management, the oneworld deal, along, is expected to bring up to $800 million in revenue.