5 Penny Stocks To Watch Today
The idea of “short squeeze penny stocks” is one of the hottest trends in the stock market right now. These high-volatility names have given traders a reason to look at low-priced stocks, in my opinion. GameStop (NYSE:GME) gave rise to the apes. Then the entire market caught a glimpse of what can happen when stocks squeeze. With the case of AMC stock, in particular, we saw multiple big moves thanks to this market phenomenon.
So now we have a base case, but what is a short squeeze anyway? To understand this, you need to understand what shorting is in the first place. When traders short a stock, they expect shares to drop and aim to capitalize on this move. To do so, they’ll borrow shares from their broker, sell them, then repurchase them once the stock drops to their desired target. Their profit is the difference between the amount received when they originally sold the shares and the amount they used to repurchase the shares to return their loan.
When do stocks short squeeze? When a stock short squeezes, it involves buyers stepping in at a faster rate than sellers. In turn, the share price increases instead of decreases. So anyone short needs to repurchase their borrowed shares at higher prices. In this case, more buying compounds, any short scrambles to cover their position, which sparks an even more significant move in a stock.
The idea of finding short squeeze stocks to buy initially involves, you guessed it, stocks with higher or increasing short interest. In this article, we’ll look at a few penny stocks to watch right now, and yes, some have shown higher levels of short interest.
Penny Stocks To Watch Right Now
1. ReTo Eco-Solutions (NASDAQ:RETO)
Shares of ReTo Eco-Solutions have been steadily climbing during the fourth quarter. Yesterday it was discussed on a list of penny stocks swing traders were likely following. You can check out more details in our article Best Penny Stocks To Buy With A Full-Time Job? 5 Hit It Big In Q4 2021. Additionally, ReTo has fallen into the names to watch amid global economic and industrial reopening efforts. In particular, the company specializes in environmentally friendly construction materials and equipment used to produce these materials.
Coming off of its last round of earnings results, RETO stock has managed to surge this quarter. As we discussed yesterday, the move has been a steady one and not something that has come overnight but over the last few weeks. Other than its place in the global reopening trade, something to keep in mind is what’s to come next. In this case, ReTo announced earlier this month that it would hold its annual shareholder meeting on November 23. Since this is less than a week away, it could be an important date to keep in mind if RETO stock is on your list right now.
2. The Metals Company (NASDAQ:TMC)
Similar to ReTo, The Metals Company has experienced a relatively slow and steady move higher recently, albeit at a much slower pace. Regardless, the growing interest in electric vehicles and battery materials has kept the company in the mainstream discussion. The Metals Company explores battery metals from seafloor polymetallic nodules. The latest acquisition of Kongsberg Digital could also further advance the company’s position in the industry.
In advance of an initial nodule collector dive test next year, the plan is to create a digital twin allowing 3D visualization of the deep-sea operation. Gerard Barron, Chairman and CEO of The Metals Company said, “The Digital Twin will give us visibility — that’s the first critical step. From there, we will keep gathering data, learning, predicting, and adapting our operations with environmental protection and operational efficiency in mind. This is a mission-critical system for us, and we could not have chosen a better, more experienced partner than Kongsberg Digital.”
With the initial dive and pilot collection trials expected in the coming year, this news seems to have brought some welcomed momentum into TMC stock.
3. Enthusiast Gaming (NASDAQ:EGLX)
Enthusiast Gaming is one of the hottest penny stocks of the month so far. It kicked things off on November 1 around $3 and has since surged to new Q4 highs of $4.36 so far this week. The company has been in the circles of esports and metaverse penny stocks to watch, thanks to its position in the digital entertainment industry.
While it isn’t one of the penny stocks with high short interest, attention has grown around its technology platform. Enthusiast offers virtual entertainment, and its recent acquisition of Addicting Games has put more focus on this company. Focused on casual gaming, the company has expanded via new game launches, more in-app purchase offerings, and deploying a social network for gamers, Project GG.
This week, Enthusiast continued its flow of announcing new milestones as well. The company reported record visitor traffic in the US to its digital media property. According to the management, “Enthusiast Gaming digital media property reached 47.8 million U.S. Unique Visitors for the month of October (Comscore Media Metrix®, Desktop 2+, Mobile 13+, October 2021 , U.S. ). The metric does not include additional under-18 mobile video traffic to the Company’s property, or viewership in the Company’s esports and entertainment division, including viewership of Luminosity Gaming. Enthusiast Gaming ranks between streaming platform Twitch, and game platform Roblox, as a top property in the overall Games category, which includes Gaming Information and Online Gaming sites. Enthusiast Gaming is the largest property in the group focused on gaming media, and its traffic is now more than double that of any other media-focused property.”
Considering a focus on esports and metaverse stocks, EGLX could be on the watch list for traders right now.
4. Yatsen Holdings Limited (NYSE:YSG)
Shares of Yatsen have experienced much more active sessions since September. While it hasn’t translated accordingly in the YSG stock price, it has suggested an uptick in interest. Yatsen provides beauty products in China, including color cosmetics and skincare brands.
This week YSG stock came out with its latest round of earnings, which have left a favorable impression in the market. Some of the specifics include an EPS beat and a $100 million share buyback program. While the company missed sales estimates, this seems to have come secondary to the more robust quarterly performance overall.
Donghao Yang, Director and Chief Financial Officer of Yatsen explained, “Total net revenues reached RMB1.34 billion in the third quarter, representing an increase of 6.0% year over year. Our gross margin continued its upward trend and reached 67.9% in the quarter compared to 65.7% in the same period last year. With ample cash reserves and our sights set on charting a sustainable path to long-term growth, we will continue to build a world-class multi-brand beauty group in China.”
5. Digital Ally Inc. (NASDAQ:DGLY)
Digital Ally is one of the short squeeze penny stocks to watch on this list. According to Fintel data, the short float percentage on DGLY stock sits just under 18%. While the last few quarters have been tough for this penny stock, the last few months have shown a stark difference. In particular, since the beginning of the fourth quarter, shares have managed to rebound $1.20 at the beginning of October to highs this week of $1.50. Several critical updates and industry events also aided this move along the way.
Thanks to things like the Kyle Rittenhouse trial, non-lethal defense stocks have been in focus. Digital Ally markets video recording products for law enforcement and other emergency responders. It also played a role in pandemic response in providing personal protective equipment and cleaning products.
This week DGLY stock is back in the spotlight thanks to its latest quarterly performance guidance. In particular, Digital Ally expects Q4 2021 revenues to surpass the $9 million mark, with fiscal 2021 revenue reaching roughly $18 million. The company also anticipates full-year 2022 revenues to reach $50 million based, in part, on the recent Q4 performance. With this latest catalyst, more attention on things like body cameras, and the higher short interest, DGLY could be on the list of penny stocks to watch right now.
Time To Find Penny Stocks To Buy?
The exciting thing about penny stocks is that there are at least a handful of cheap stocks to watch even if markets are down. Having an understanding of how to trade them is the next thing to master. There can be a lot of noise out there to translate. However, if you’ve got a solid plan in place and understand a few things like chart patterns, then you are well on your way.