This could be a hectic week in the stock market, whether you’re trading penny stocks or higher-priced stocks. If you read the article on what to watch this week, you already know what’s coming. Economic data, earnings, and one of the biggest events, the January FOMC meeting, will help set the tone for the first quarter of the year. However, even with this as the case, the great thing about penny stocks is they generally move untethered to broader market trends.
Some of the attention on cheap stocks has focused on the ones with higher short interest. Why? When stocks experience a short squeeze, the resulting moves can be aggressive. The interesting part is there can be big breakout squeezes even if the stock market is down. Where can you look to start putting together a list of short-squeeze stocks?
Short interest is a good metric, to begin with. There aren’t any guarantees that stocks with high short interest will squeeze. But they are typically the ones that anyone “squeeze hunting” will look to first. This article looks at a handful of stocks that fit this mold. We also look into what some of the other potential catalysts are or could be so you’ve got a better understanding of what’s going on in the market for these companies. Then you can decide if they’re worth adding to your watch list or not.
Short Interest Stocks To Watch
Tattooed Chef (TTCF)
Short Data: Fintel – 31.39%, TDAmeritrade – 33.34%
Thanks to the stock market sell-off last year, it isn’t uncommon to see some household name stocks trading under $5. Tattooed Chef is one of these names that you’ve likely seen in a local grocery store. The company focuses on providing plant-based, ready-to-cook food. But dwindling financials have continued hurting the share price. Last quarter, Tattooed Chef saw its EPS drop significantly while decreasing its 2022 revenue guidance. The company previously set its expectation in a range of $280 million to $285 million but lowered the range to $235m-$245m, which the market didn’t take kindly to.
Now, in 2023, shares of TTCF stock have slowly recovered. The company recently launched a line of oat butter bars available at known retailers. These include the likes of Harris Teter, Lowes Foods, Nugget Markets, and Central Market. But that may come secondary to what some traders are focused on this week, which is the short data.
The data varies. However, the range between Fintel and TD Ameritrade is relatively slim, between 31% and 34%.
Aemetis Inc (AMTX)
Short Data: Fintel – 20.93%, TDAmeritrade – 18.09%
Aemetis is another one of the companies that traders are watching this week. Short data ranges between 18% and just under 21% as the company’s share price attempts to recover from recent 52-week lows of $3.62.
The company produces renewable natural gas and fuels, with construction recently beginning for a solar microgrid array in California. Last quarter the company announced that TotalEnergies and Schneider Electric’s solar microgrid system would be integrated with a new Rockwell/Allen Bradley control system and Aemetis’ Advanced Fuels biorefinery once complete.
Eric McAfee, Chairman, and CEO of Aemetis, explained, “This microgrid, along with other energy-saving technologies being implemented at our low-carbon ethanol facility, will further reduce the carbon intensity score of the fuel ethanol produced…Aemetis can also displace natural gas with carbon negative Renewable Natural Gas (RNG) upgraded and injected at the same facility in Keyes, California.”
Analysts at Stonegate Capital Partners have high hopes for the company. Right before the end of the year, the firm updated its coverage of the company. Dave Storms, CFA, explained, “Aemetis outlined a 5-year plan to reach $1.5B in revenue and $461M in adjusted EBITDA by 2026 vs F21 revenue and adjusted EBITDA of $211.9M and $(6.4)M. respectively. This plan is expected to be updated in 1Q23.” Storms further explained that based on the valuation model used, “we arrive at a valuation range of $24.38 to $36.38 with a midpoint of $29.66.”
Blue Apron Holdings Inc. (APRN)
Short Data: Fintel – 48.69%, TDAmeritrade – 43.08%
Blue Apron is no stranger to being on a list of short-squeeze stocks to watch. It has been at the center of focus plenty of times, with clear examples last year when squeezes actually activated. Now that APRN stock is trading around the $1 level, there seems to be a different group of traders looking at the company.
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Despite attempts to grow via non-subscription-based initiatives, Blue Apron remains under pressure. One of the saving graces that has been a point of interest is the company’s ability to find funding sources. One of its largest investors, Joseph Sandberg, and his affiliates have committed to funding a purchase obligation of $55.5 million at $5.65 per share. Blue Apron has also begun cutting its workforce and seeking to drop expenses by $50 million this year.
In the meantime, APRN stock has been on the list of short-interest stocks to watch. It makes sense as data from Fintel and TD show this figure well above 40%, with Fintel’s sitting at nearly 49%.
Vroom Inc. (VRM)
Short Data: Fintel – 15.3%, TDAmeritrade – 14.88%
Automotive stocks took a hit during the second half of the year last year. Making the most headlines was Carvana (NYSE: CVNA), which became a penny stock in December. Shares of the automotive stock imploded in 2022, dropping from highs of over $160 to well below $5. Other companies in the auto retail space also echoed that same trend. Vroom Inc. is one of the many examples.
This year has started stronger than how VRM stock finished last year. The penny stock climbed back above the $1 mark as the company goes through a streamlining phase. Earlier this month, Vroom announced a headcount reduction of 275 employees, roughly 20% of its workforce. Vroom expects to achieve $27 million in annualized cash savings as a result.
Regardless of the cost-cutting, VRM stock’s short interest has come into focus this week. While it isn’t as high as some of the other names on this list of penny stocks, it could be something to note if they’re on your radar. Fintel shows the highest short float percentage at 15.3%, while TD’s is slightly lower at 14.88%.
Biora Therapeutics Inc. (BIOR)
Short Data: Fintel – 48.22%, TDAmeritrade – 28.97%
This month Biora Therapeutics’ stock exploded after headlines came out. In particular, the company announced receipt of pre-IND feedback from the FDA regarding plans for its PGN-600 program for treating ulcerative colitis. Analysts at HC Wainwright also adjusted their price target on Biora to $65 around the same time. With multiple catalysts helping boost shares, BIOR stock started to find itself on watch lists in January.
Most recently, Biora filed a shelf on behalf of selling stockholder Armistice Capital Master Fund to sell up to 90,000 of its shares. It doesn’t seem to have impacted the general trend for the stock so far. Sometimes share selling can. What’s more, the market appears to have taken notice of BIOR stock’s short float. According to Fintel, the short float percentage sits at around 48%. This is much different than what TD shows, which is closer to 29%.
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List Of Short-Interest Penny Stocks To Watch
- Tattooed Chef (NASDAQ: TTCF)
- Aemetis Inc (NASDAQ: AMTX)
- Blue Apron Holdings Inc. (NYSE: APRN)
- Vroom Inc. (NASDAQ: VRM)
- Biora Therapeutics Inc. (NASDAQ: BIOR)
