Penny Stocks To Buy Now
There are plenty of penny stocks to buy right now, but some of the most sought-after right now are ones with high short interest. What’s the biggest reason for this? When traders who are short get caught in a short squeeze, the resulting rally can be violently aggressive to the upside. Are all heavily shorted stocks destined for massive short squeezes?
No, but that’s where research will come in handy, and today we look at a handful of penny stocks that have been heavily shorted. We’ll peer into the latest events and discuss what other catalysts could be at play. It will be up to you to decide if they’re the best penny stocks to buy now or if the risk is too high that you should avoid them entirely.
Penny Stocks To Buy [or avoid]
- FaZe Holdings Inc (NASDAQ: FAZE)
- Blue Apron Holdings (NYSE: APRN)
- Rite Aid Corp. (NYSE: RAD)
- Party City Holdco Inc. (NYSE: PRTY)
FaZe Holdings Inc (NASDAQ: FAZE)
Many of the names on this list of penny stocks will be recognizable to most of you. The 2022 stock market crash has made selling more popular than buying. With the addition of short selling, the climate is ripe for a downtrend to take hold. That’s what we’ve seen from many brands and household name stocks this year.
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Newly minted public gaming & entertainment company, FaZe Holdings is the newest name to slip into penny stock territory. The company made its debut in July at around $13 a share, rose to nearly $25, and just hit fresh record lows this week of $4.29. FaZe also recently filed to offer up to 5.9 million shares in addition to selling shareholders to resale up to 64 million shares and 173,333 warrants. Dilution headlines have added fuel to the fire and short interest in the stock.
As of this article, data from Fintel.IO shows the FAZE stock short float percentage sitting around 154%. This is a stark difference from other outlets, including TDAmeritrade, which has the FAZE stock short float percentage at roughly 5%.
Blue Apron Holdings (NYSE: APRN)
Shares of Blue Apron Holdings are no stranger to a short squeeze. It was the center of interest among retail traders between August and September. Daily volatility brought plenty of attention from short-term traders. The longer-term timeframe shows a sustained climb from under $4 to over $8. Since then, shares have gotten beaten up thanks, partly to news of an equity distribution agreement to sell up to $15 million worth of stock. Once again, the threat of dilution put the brakes on a rally, with APRN stock hitting fresh 52-week lows of $2 last week.
What’s next for the meal kit company? Blue Apron has begun expanding its model beyond the membership model. The company’s products are now available in its U.S. Amazon store for all to purchase. “Our customers regularly tell us how much they love our meals. By offering a selection of products in the U.S. Amazon store, we are able to provide Amazon customers the opportunity to buy a range of chef-curated meals that will arrive quickly to their door,” said Josh Friedman, Blue Apron’s Chief Product Officer.
The APRN stock short float percentage is wide-ranging, depending on the source of data you’re using. Fintel.IO shows this figure at roughly 39%, while TDAmeritrade has the APRN stock short much higher at 67.7%.
Rite Aid Corp. (NYSE: RAD)
Pharmacy company Rite Aid Corp. is once again a penny stock. Over the years, it has bobbed in and out of the sub-$5 range, with the latest downtrend coming from poor Q2 earnings. Last month Rite Aid posted a wider loss for the quarter on costs related to its store closure plan.
It also warned of increased pressures on consumer spending and its supply chain for the remainder of the year. Adding to the downtrodden results was its 2023 guidance. Rite Aid said it anticipates a more significant loss of up to $520.3 million.
Heyward Donigan, president, and CEO, explained, “As we look to the second half of the year, we expect continued pressure on consumer spending and supply chain challenges. At the same time, we are ready to meet a high demand for immunizations, while driving continued strong performance at Elixir and further SG&A expense reductions.”
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As RAD stock flirts with the $4.30 level, some traders have looked beyond the latest financial results and focused on some of the metrics in the market. According to data from Fintel and TDAmeritrade, the RAD stock short float percentage is 17.39%.
Party City Holdco Inc. (NYSE: PRTY)
There are a lot of holidays coming up, and party stores begin to get busy this time of year. Party City Holdco is a notable name that experienced a squeeze in August that took shares of PRTY stock up to highs of $2.75. One of the more significant catalysts for that move besides the heavier short interest was Q2 earnings results.
Party City reported better-than-expected earnings per share. The company also set its full-year guidance to a range of $2.15 billion – $2.225 billion. Brad Weston, Chief Executive Officer of Party City, stated, “For the back half of the year, we continue to expect the supply chain volatility and inflationary pressures to persist and, as a result, are revising our full-year outlook. Given the continued broader macro pressures, we continue to operate the business with discipline from an expense and capital standpoint. Importantly, all of the progress we’ve made on our strategic initiatives is strengthening our market position, which will serve us well over the near and long-term.”
With Halloween quickly approaching and kick-starting the holiday season, Party City is one of the names traders are beginning to watch. Regarding short interest, Fintel.IO shows a figure of 15.47%, while other outlets, including TDAmeritrade, have a slightly lower figure set at 12.39%.
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