Thanks to the stock market selling off this year, there are plenty of new penny stocks to watch. With that has also come a higher level of short selling to capitalize on the moves lower. But that is what some retail traders are betting on if and when the market turns around. The idea of a short squeeze remains in focus thanks to countless examples of behemoth moves from some of the smallest stocks.
While GME and AMC stock may have opened the eyes of retail traders to this phenomenon, market dynamics have done the rest. As a result, stocks with higher short interest are on the list for day traders each session.
In this update, we look at a few more short-float penny stocks to watch. This will continue the list from our article Penny Stocks To Buy Now? 6 Short Squeeze Stocks To Watch. Of course, there aren’t any guarantees that high short interest will guarantee a squeeze. But if you’re looking for stocks that fit the potential mold, the first place to begin is with short data.
Penny Stocks To Watch
F45 Training Holdings (FXLV)
The Fast 45-minute exercise franchise company, F45, made a big splash in the headlines when it IPOed. With celebrities like Mark Wahlberg talking it up, the stock quickly gained plenty of interest. Since its IPO, however, FXLV stock has dropped significantly lower. It was even one of the penny stocks under $1 to watch earlier this summer.
Fast-forward to this month, and shares have seen a strong performance. They’re not trading over 100% higher from the summer lows of $0.79. A recent earnings beat has the company somewhat back in good graces with the markets. Shares have also gotten a bullish response from Wall Street analysts. Goldman Sachs recently upped its price target to $3.
What also has the interest of the market is a strategic alternative review that includes a potential take-over by Kennedy Lewis Investment Management. KLIM proposed an acquisition in September that included a buyout at $4 a share in cash. A special committee has been formed to review and evaluate the proposal.
Is FXLV stock a short-squeeze penny stock to watch? According to data from Fintel.IO, the short float percentage on F45 sits around 24%.
Avaya Holdings (AVYA)
Shares of Avaya Holdings turned heads in the stock market today. The penny stock experienced its highest single-day trading volume of the year, with more than 120 million shares traded by the 2 PM ET hour. AVYA stock has attempted to recover after headline-fueled selling took shares to new 52-week lows this week.
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The company recently disclosed “certain business information that it confidentially shared” with certain of its financial stakeholders. The info related to the ongoing constructive discussions Avaya is having with its financial stakeholders. Right now, there’s a comprehensive resolution ongoing to potentially strengthen the company’s balance sheet and business overall.
In a December update, Alan Masarek, Avaya’s Chief Executive Officer, said, “We are pleased to remain engaged in constructive discussions with all of our financial stakeholders to enhance our capital structure, increase liquidity and accelerate our investment in innovative products and solutions.”
Speculation has focused on a potential bankruptcy proceeding. Blomberg reported the company was trying to clear up problems around its accounting standards. As far as short data goes, the AVYA short float percentage sits around 24%, according to information from Fintel and TDAmeritrade.
Uranium Energy (UEC)
Energy stocks have become a broader focus in 2022 thanks to numerous catalysts, including geopolitical unrest. Uranium is one of the energy sources being thrown into the mix as both an alternative energy and a means to become less dependent on oil & natural gas. Like most penny stocks, speculation has become the fuel to the fire, and uranium stocks have gotten brought back into the spotlight.
Uranium Energy is one of the names seeing an uptick in interest this week as a result. The latest move comes after weeks of downward pressure that took shares to lows of $3.02 last week. This week Uranium Energy piqued the interest of traders after announcing a new award it won from the US Department of Energy. The company will supply 300,000 lbs of US-origin uranium concentrates. Whether or not that prompts more bullishness for UEC stock is to be seen.
But one thing that has come into focus is the UEC stock short float percentage. According to Fintel and TDAmeritrade data, that figure is around 12.4%.
Assertio Holdings (ASRT)
Assertio stock continues climbing higher this week – a move that began mid-October. The penny stock finally filled a gap from earlier in the year when selling pressure sparked a massive price drop. That was a move ignited following news of a $60 million offering.
Fast-forward to now, and ASRT stock price is hovering around the higher end of its 2022 range. An earnings beat and raised guidance have helped spur new momentum for the penny stock. Assertio reported Q3 EPS of $0.08 compared to $0.07 estimates. Sales of $34.21 million also beat the $31.33 million expected.
Third-quarter results demonstrated the value of our platform, driving more than $21 million in adjusted EBITDA and $10 million in cash flow from operations. In addition, our refinancing extends maturity, significantly reduces our debt service cost, and creates greater operating flexibility as we continue to seek strategic growth transactions that will further diversify our portfolio,” said CEO Dan Peisert in its November business update. Now investors are looking ahead to January when Assertio’s executive team hosts one-on-one investor meetings at the JP Morgan Healthcare Conference.
What’s the short interest on ASRT stock? According to data from TDAmeritrade, the short float percentage sits at around 12.5%.
What Is A Short Squeeze?
First, you should understand what shorting stocks entails. Short selling is when an investor borrows shares of a security and sells them in the market. The hope is to see shares fall in price, then repurchase, then at a lower price to return the borrow. If the price of the security increases instead, the short seller is still required to buy shares. This time, however, it is at a higher price to cover their position and limit their losses.
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A short squeeze is when a heavily shorted stock or other security experiences a sharp price increase, forcing short sellers to buy shares to cover their positions and avoid potentially unlimited losses. This buying activity can create a self-reinforcing cycle, driving the price of the security even higher and leading to further covering by short sellers.
3 Ways To Identify Potential Short Squeeze Stocks
There are a few ways to identify stocks that may be prone to a short squeeze:
- Look for stocks with a high short-interest ratio: This ratio compares the number of shares that have been sold short to the number of shares that are available to be traded. A high short-interest ratio can indicate many investors betting against the stock. It could make it more vulnerable to a short squeeze if the stock’s price rises.
- Check for unusual trading activity: A sudden surge in trading volume or a rapid increase in the stock’s price could signify that a short squeeze is underway.
- Monitor news and market conditions: Positive news about a company or changes in market conditions can sometimes trigger a short squeeze. Keep an eye on the news and market trends to identify potential catalysts for a short squeeze.
It’s important to note that identifying a potential short squeeze is only one part of the equation. Short squeezes can be highly volatile and unpredictable. Therefore, investing in a stock that is experiencing a short squeeze carries a high level of risk. It’s essential to thoroughly research any investment and consider the potential risks and rewards before deciding.
List Of Penny Stocks To Watch
- F45 Training Holdings (NYSE: FXLV)
- Avaya Holdings (NYSE: AVYA)
- Uranium Energy (NYSEAMERICAN: UEC)
- Assertio Holdings (NASDAQ: ASRT)
- Heron Therapeutics Inc. (NASDAQ: HRTX)
- Transocean Limited (NYSE: RIG)
- Blue Apron Holdings (NYSE: APRN)
- PLBY Group Inc. (NASDAQ: PLBY)
- Grom Social Enterprises (NASDAQ: GROM)
- Gossamer Bio (NASDAQ: GOSS)
