This week could bring some fluctuations to the stock market. Whether you’re investing in penny stocks or more expensive shares, several key factors will shape the year’s first quarter. Economic data releases, earnings announcements, and the highly anticipated January FOMC meeting are just a few of the things that will play a role. However, it’s worth noting that penny stocks often behave independently of broader market trends.
There has recently been a growing interest in cheap stocks with high short interest. Why does that matter? A short squeeze occurs when investors who have bet against a stock by borrowing shares are forced to buy back those shares at higher prices to cover their losses. This phenomenon can result in a rapid surge in the stock price. Where can you start searching for short-squeeze stocks?
Short interest data is a good starting point. There are no guarantees that stocks with a high level of short interest will squeeze. But they are usually the first ones people will take a closer look at. This article focuses on a list of penny stocks that meet these criteria. Additionally, we will try to find any potential catalysts to provide you with a better understanding of the current market conditions surrounding these companies.
With this information, you can decide whether they are worth adding to your watch list. This is also a continuation of our list of short squeeze stocks from the article “Penny Stocks To Buy: 5 Short Interest Stocks To Watch Now.” The complete list will be provided at the end of the article.
Short Interest Stocks To Watch
Faraday Future Intelligent Electric Inc. (FFIE)
Short Data: Fintel – 18.35%, TDAmeritrade – 29.20%
Faraday Future has been on our list of penny stocks to watch for months, and during that period, FFIE stock has continued climbing. A mix of new milestones, speculative trading action, and support from the Fintwit community have helped breed optimism in the stock market for the EV company.
Faraday Future is a smaller EV upstart that has progressed forward in launching its flagship product, FF 91 Futurist. A rework of its leadership and funding seems to have brought more reassurance to traders watching the company. Most recently, Faraday appointed its GLobal Executive VP of Global User Exosystem, Tin Mok, to the Board of Directors.
The news comes just a few weeks after signing a deal with the City of Huanggang Province in China to relocate its future FF China Headquarters to support the US-China “dual home market” and dual “DNA strategy.” Now, attention is likely on Faraday’s production commencement of the FF 91 Futurist. The company set the end of March to begin production and the end of April (or before) to start rolling out deliveries.
Is FFIE a short-squeeze penny stock? According to Fintel & TD Ameritrade data, the FFIE stock short float seems to be sitting between 18% and 29%.
Sientra Inc. (SIEN)
Short Data: Fintel – 122.36%, TDAmeritrade – 124.06%
Sientra stock has one of the group’s highest listed short float percentages. According to Fintel and TD, that figure is between 122% and 124%. Like all types of data, the accuracy of the actual reporting can come into question at such extremes. Nevertheless, it doesn’t discount the figures shown by these outlets today.
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SIEN stock has only recently begun catching attention after hitting fresh 52-week lows last week. The stock slipped following a reverse split earlier this month. Now, however, it looks like traders are starting to speculate on the company’s next move. The medical aesthetics company won approval from the United Arab Emirates Ministry of Health and Prevention to market its smooth surface, High-Strength Cohesive (HSC and HSC+) silicone gel breast implants in the United Arab Emirates.
But the news may be secondary to market data. That doesn’t only include the short interest. Thanks to the reverse split, it could also put SIEN on the list of low-float penny stocks to watch. Lower floats mean less supply in the market and can translate into higher volatility. Keep this in mind if SIEN is on your watch list.
Gossamer Bio Inc (GOSS)
Short Data: Fintel – 35.22%, TDAmeritrade – 30.21%
Last year, Gossamer announced Phase 2 trial data in its study of seralutinib for treating pulmonary arterial hypertension. Among several points of focus was a serious adverse event in the seralutinib arm of the study. Overall treatment-emergent adverse events were reported in 86% and 93% of patients in the placebo and seralutinib arms.
Even with that as the case, there was optimism regarding efficacy results. Pulmonary Hypertension Division head at the University Hospital in Giessen explained, “highlit compelling potential differentiation for seralutinib as an anti-proliferative, anti-inflammatory, and anti-fibrotic therapeutic candidate with possible reverse remodeling effects.”
Earlier this month, State Street Corporation and Millennium Management filed Schedule 13Gs showing stakes in GOSS stock ranging from 5.1% to 29.47% (State Street). While those reports have been out for weeks, it may be something traders are paying attention to if GOSS is on their list of penny stocks to watch. In addition, short data from TD and Fintel have the short float percentage on GOSS stock sitting between 30% and 35%.
Pardes Biosciences Inc. (PRDS)
Short Data: Fintel – 24.88%, TDAmeritrade – 8.12%
The short data between Fintel and TD varies right now. Of the two, Fintel’s is the highest, with a PRDS stock short float percentage of nearly 25%. One thing Pardes has experienced that some of the others on the list haven’t is a more prolonged uptrend that began late last year.
The biotech company has been developing its PBI-0451 platform as a potential oral antiviral drug candidate to potentially treat and prevent COVID-19. Despite easing concerns, the virus still exists, and companies are still looking to “build a better mouse trap,” so to speak. In a quarterly update, CEO Thomas Wiggans explained that Pardes “made significant progress in our pursuit to bring a stand-alone, easily administered oral treatment to patients suffering from COVID-19, highlighted by the commencement of our PBI-0451 Phase 2 trial in September 2022,” and that the company looks forward to “sharing the preliminary results from this study in the first quarter of 2023.”
As the clock ticks on this quarter, some speculation has begun to form. Multiple analysts have set price targets much higher than current levels, and the short data has come into focus this week. JMP Securities and SVB Leerink have set $9 price targets for PRDS stock.
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Short Data: Fintel – 20.17%, TDAmeritrade – 20.15%
The beaten-down medtech company has faced plenty of headwinds due to its mixed performance. The most recent update from SmileDirectClub prompted a bit more optimism in the stock. It gave an update highlighting a plan to drive profitability and positive cash flow. It also issued preliminary Q4 revenue guidance, which came in below estimates. Even with that as the case, shares of SDC stock woke up after the company presented its cost-saving strategy for the year.
“SmileDirectClub has taken decisive steps over the past year to embed rigorous financial discipline throughout the business and ensure we are positioned to capitalize on the investments we have made to place our company on the leading edge of innovation in oral care technology,” said CEO David Katzman.
Ahead of the official year-end results coming in February, traders are looking at the SDC stock short data. Right now, Fintel and TD both show this at around 20%.
List Of Short-Interest Penny Stocks To Watch
- Faraday Future Intelligent Electric Inc. (NASDAQ: FFIE)
- Sientra Inc. (NASDAQ: SIEN)
- Gossamer Bio Inc (NASDAQ: GOSS)
- Pardes Biosciences Inc. (NASDAQ: PRDS)
- SmileDirectClub (NASDAQ: SDC)
- Tattooed Chef (NASDAQ: TTCF)
- Aemetis Inc (NASDAQ: AMTX)
- Blue Apron Holdings Inc. (NYSE: APRN)
- Vroom Inc. (NASDAQ: VRM)
- Biora Therapeutics Inc. (NASDAQ: BIOR)