Are These Penny Stocks Worth It With High Short Small-Caps in Focus
In the past few weeks, high-short penny stocks have been the focus of many investors. To understand why we have to take a look at what occurred earlier this year. When a group of Reddit traders on the subreddit, r/WallStreetBets got together to beat out a massive institutional short position on GME stock, shares subsequently skyrocketed.
This was the first instance of retail traders banding together, but it would not be the last. Soon after, traders got together and did the same with AMC stock, BB stock, and several others with high-short positions. And again, these all yielded massive returns.
What’s Going On With BBIG Stock?
So fast forward a few months, we are seeing the same pattern occur. Last week, it resulted in an over 1,000% gain for SPRT stock. And now, traders are aiming their sights on BBIG stock. In the past month, shares of BBIG have skyrocketed by over 200% to its current price of $9.92.
Now, we have covered Vinco Ventures dozens of times as it was a penny stock only a few days ago. We even covered it last week in a piece titled ‘4 Short Squeeze Penny Stocks To Watch After SPRT Stock’s 1,309% Run’. So, it’s clear that the trend of investors buying into short-squeeze stocks is not going anywhere anytime soon. And the result is that traders need to stay as up-to-date as possible on which stocks could be the next big short-squeeze penny stocks.
Why is BBIG Stock Exploding Right Now?
As stated earlier, BBIG stock is one of the biggest gainers of the past few weeks. In the last month, shares of BBIG have shot up by over 200%. And, since the beginning of the year, those same shares are up by a staggering 690% or so. This massive climb has brought BBIG stock to right under $10 as of September 1st despite it being a penny stock only a few trading days ago.
For some context, Vinco Ventures is an acquisition company focused on its B.I.G strategy, or buy, innovate, grow. It works in the media and content tech industry, which has grown tremendously over the course of the pandemic. In its most recent balance sheet, posted for the second quarter of this year, Vinco stated that it held more than $80 million in cash.
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In addition, it completed the acquisition of 80% of Lomotif jointly with Zash Global Media and Entertainment through the venture known as ZVV Media Partners LLC. Despite a decrease in revenue as a result of lessened sales of PPE equipment, Vinco did make some big strides during the quarter. This includes the sale of the first-ever album to go platinum on the blockchain, with over 1 million units sold of Tory Lanez’ album, “When It’s Dark”. So, with all of this in mind and BBIG stock’s major recent gain to boot, will it be on your list of penny stocks to watch?
4 Penny Stocks to Watch Right Now
- Denison Mines Corp. (NYSE: DNN)
- Sequential Brands Group Inc. (NASDAQ: SQBG)
- Aterian Inc. (NASDAQ: ATER)
- SOS Ltd. (NYSE: SOS)
Denison Mines Corp. (NYSE: DNN)
Denison Mines Corp. is a mining penny stock that has climbed by over 16% in the past five days. While this may not seem substantial when compared to BBIG stock, it is quite large for a mining stock. If you haven’t heard of Denison Mines, it is a uranium exploration and development company.
Its main project is the Wheeler River Uranium project located in the Athabasca Basin region in Saskatchewan, where it holds a 90% interest. In the past few years, uranium has taken off due to its potential as an alternative energy source. And as a result, many investors have hopped on to the uranium trend.
On August 5th, the company reported its results from the second quarter of 2021. In this quarter, it discovered high-grade uranium outside of the Phoenix Zone A high-grade domain. It also increased its anticipated ISR mining head grade at Phoenix by 50% in the quarter. In addition to this, Denison completed the acquisition of 50% of JCU Exploration Company Limited for $20.5 million. This is all big news and shows that Denison Mines is working hard to grow.
“The Company continues to successfully advance on its ambition of developing the high-grade Phoenix deposit, as potentially one of the lowest cost uranium mines in the world, at a time when the uranium market is showing signs of a sustained recovery and the beginnings of a new contracting cycle.”The President and CEO of DNN, David Cates
If we consider both the trajectory of the uranium industry and Denison’s consistent momentum, it could be worth giving a first or second look. Keeping this in mind, will DNN make your list of penny stocks to watch?
Sequential Brands Group Inc. (NASDAQ: SQBG)
One of the other big gainers of the day so far is SQBG stock, shooting up by over 60% at midday. Earlier in the day, the company announced that it had commenced upon a voluntary Chapter 11 filing.
And only a day earlier, it received a notice from the NASDAQ, informing the company that it had not filed its Form 10-Q on time, and that it no longer was in compliance with the NASDAQ listing rules. Now, it will have to submit a plan of re-compliance by September 3rd or it will face delisting. In a press release announced earlier in the week, the company stated that it deterred “as a result of the significant debt on its corporate balance sheet, it was no longer able to operate its portfolio of brands.”
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If you’re unfamiliar, SQBG is the owner of popular brands such as Joe’s Jeans, the Jessica Simpson fashion collection, and Gaiam yoga. With debts of over $435 million and assets of $443 million, the company is currently seeking a $150 million loan to help reorganize its business.
The company also states that this situation is a result of the pandemic and its effect on retail sales. We’ve seen similar situations occur with other major retailers such as Neiman Marcus and J.C. Penney Co., which both filed for bankruptcy respectively earlier in the year. So, while its major gain today is a plus, investors should keep in mind that SQBG stock looks to be highly volatile right now.
Aterian Inc. (NASDAQ: ATER)
If you’re looking at some of the fundamentals of BBIG stock right now, share structure might be important. Earlier this quarter, we discussed Aterian after shares surged late in August. The company has recently been battling back from a near year’s long bout of selling in the market.
Negative headlines surrounding fundraising efforts didn’t help either. However, if you look at the current trend focusing on potential “short squeeze stocks” you may see something interesting. For one, there is a short float percentage of over 23% right now. Also, the float itself is under 25 million shares. While BBIG stock’s short float was much higher, its overall float was sitting at a similar level.
What To Watch With Alterian?
The company specializes in eCommerce and offers software to build top-selling brands. Alterian’s AIMEE (Artificial Intelligence Marketplace Ecommerce Engine) uses machine learning and language processing to leverage data analytics and scale product offerings across multiple online marketplaces. These include Amazon, Shopify, and Walmart. Its recently launched “Shareholder Perks” program has gotten some attention this week. It incentivizes current and potential ATER shareholders by offering discounts on top products from Alterian brand websites or Amazon.com.
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Yaniv Sarig, Co-founder and CEO of Aterian explained in a recent press release, “Shareholders who join the Perks Program will receive weekly emails starting this Friday with exciting discounts they can redeem on our various channels. We want to thank our shareholders who support us daily.”
With an uptick of interest in “short squeeze stocks” it looks like ATER could be on the radar. But keep in mind, volatility may also play a role so keep that in the back of your head if ATER stock is on your list right now. The down can be just as swift as the moves up in the market.
SOS Limited (NYSE: SOS)
Aside from the trend in short-squeeze stocks, you’ve also got a lot to watch in tech. Namely, the uptick of attention on things like digital assets, blockchain technology, and cryptocurrencies. In this case, SOS Limited has gained momentum as crypto prices climb. The company specializes in mining cryptocurrencies.
The company mines crypto and over the last few months has launched thousands of new mining rigs that mine both BTC and ETH. Thanks to the rise in prices of both, it’s clear as to how that would benefit a company that derives revenue from this type of operation. Furthermore, SOS has gone a step further in addressing certain concerns about the cryptocurrency mining industry.
Earlier this year, Bitcoin dropped thanks to the negative sentiment on how new coins are mined. High levels of power usage that may translate into higher emissions as a byproduct brought environmental concerns to the forefront. In the case of SOS, the company has also established partnerships with companies like Niagra Development to provide affordable power to sustain its mining operations. This move also further strengthened its foothold in the US market.
With momentum building in cryptocurrencies, mining, NFTs, blockchain, and the like, SOS stock could be one to watch right now.
Are Penny Stocks Worth Buying Right Now?
The short answer to this question is that it is completely dependent on you and your trading style. With hundreds of penny stocks to choose from, finding the best ones for your portfolio can be challenging.
However, right now there is a lot of volatility in the market moving in both directions. And with the right trading education and proper fundamentals, investors can take advantage of these big moves. Considering this, do you think that penny stocks are worth it right now?