Find out the meme stocks that could potentially become the next big hit in the stock market.
There has been a revolution in stocks this year! Call them meme stocks, stonks or momentum investing, whatever you call them the effect has been truly powerful.
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Nation, at no other time in almost two decades analyzing stocks have I seen anything like this, a period where so many people are literally getting rich so quickly. Even leading up to the dot-com bubble, it took Cisco more than four years to produce a 20-fold return on the shares.
This year, shares of GameStop did that in less than a month.
But the problem has been identifying these potential short-squeeze stocks before that big first day run. Sitting in your pajamas in front of Reddit is no help, the boards flash with hundreds of stocks a day and only a few become true meme runaways.
NOW we have a list to work from though. In this video, I’ll show you that initial list and show you how to narrow it down. I’ll then reveal five potential meme stocks that could be the next to go to the moon.
I’ll be starting in the Featured Collections area of Stockcard.io, a great resource for finding groups of stocks around a theme and we’ll start with the potential meme stocks collection, a list of 295 companies with a high percentage of the shares sold short.
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Let’s get started but first, you know I’ve got to send a special shout-out to all you out there in the Bow Tie Nation, thank you for spending a part of your day to be here. If you’re not part of the community yet, just click that little red subscribe button. It’s free and you’ll never miss an episode.
Looking at that initial list of potential meme stocks, we see MarineMax, ticker HZO, which I highlighted in a video last month about Reddit stocks and is up almost 10% since. Now this initial list is based on companies with more than 15% of the share float sold short. It also filters out the smallest companies. So here we’re looking at companies over $50 million market cap and with a high percentage of shares sold by hedge funds and traders.
And one thing we need to define here is that idea of share float versus shares outstanding because it’s so important to that short-squeeze potential in a stock. Shares outstanding is all the shares issued by a company. You can get this by dividing the market cap by the share price or most investing apps will show you. More important though is the share float which is the number of shares outstanding that are actually available for investors to trade.
You see, at any given time, there could be millions of shares a company has issued that are not available. These shares might be held by insiders or might be restricted from selling or have a lock-up period. So the share float count is a truer picture of how many of those shares are actually available for investors.
To that initial list then, I’m also going to go into the screener and filter for stocks between $1 to $10 a share because that seems to be where a lot of the retail trading and the short squeezes are happening. And just making this small change, we narrow the list down to 68 stocks to research further.
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5 Potential Meme Stocks That Could Be the Next BIG Thing
First on our list, I’ve been following shares of Inseego, ticker INSG, since November of last year, and really like the industry for this stock.
The company is a leader in device-to-cloud networking hardware and software to enable broader 5G coverage, faster data speeds and lower latency…which over the next three to five years, as 5G adoption improves and the Internet of Things revolution builds, I don’t know if there’s a better industry to be in.
At $968 million market cap, there are 104 million shares issued with almost 22% of them shorted, one of the highest sold short in our list. With 56% of the shares owned by institutional investors, all we need is a catalyst to drive that short squeeze.
And we could be looking at catalysts for revenue growth in a global expansion campaign. The company is investing right now in growing its international sales and marketing as well as a newly launched 2nd generation of 5G products
Synchronoss Technologies, ticker SNCR, is one I’ve been following for a while, a $276 million provider of cloud- and software-based activation solutions for mobile users.
The company is positioned as a leading cloud platform for mobile and ahead of what could be a boom in the 5G rollout. It brought on AT&T and TracFone as new customers last year and 80% of revenue is from recurring customers.
Synchronoss has 200-plus customers and more than 135 patents for a solid competitive advantage in cloud and messaging. A cost saving program this year helped it reduce operating costs by 17% and drive positive EBITDA growth even on slightly lower sales revenue.
The company has just over 86 million shares available at around $3 each but nearly 19% of the float is sold short and I think market growth helps push this one higher to squeeze those players out.
We’ve still got three more potential meme stocks to highlight but I want to get your input on this. We’ve covered these short-squeeze stocks here on the channel a few times and the videos seem to be popular. But in a survey I did in the Community Tab last week, only 9% of you said you wanted to see more videos on the topic. I want to get an idea of what videos YOU want to watch, so scroll down and let me know in the comments below if there’s a topic in stocks or investing you want to see.
Next here is one I recently covered in a video on best penny stocks, $120 million biotech Imara Inc, ticker IMRA.
Imara isn’t widely covered by analysts but does have strong buy ratings from analysts at Morgan Stanley and Citigroup. Imara is a clinical-stage biotech developing therapies for rare inherited blood disorders like sickle cell and Thalassemic cells. It’s currently in Phase 2 trials of its IMR-687 product for three indications and in pre-clinical for a form of heart failure.
At just under $7 a share, the company has 17.6 million shares outstanding with 18% of the float sold short. Insiders and institutions hold nearly 100% of the shares outstanding which sets this one up for an easy short squeeze.
That could come at any moment, especially on any good news from the clinical triales. Imara expects to report interim data on both its programs in the second half of the year and could start Phase three in 2022.
Our next short squeeze candidate is another biotech, $1.7 billion Inovio Pharmaceuticals, ticker INO.
Inovio has 11 potential drugs in its pipeline with a strong mix of external partnerships as well as its own funded products. The majority of these are in Phase 2 or later, where you start getting close to the deal-making news and sales.
And this is where you see a lot of those heavily shorted stocks, in biotech companies like this. Short sellers are betting that those clinical trials go sour and don’t produce the results needed. Of course, all it takes is one good product and a breakthrough result to send the shares higher and the short-sellers running!
Inovio has the highest share count of the group which could limit the potential for a squeeze but with almost 23% of the float borrowed, it’s also the most heavily shorted. With more than a third of the shares outstanding owned by institutionals, there is room for a squeeze here.
Lordstown Motors, ticker RIDE, is the most controversial on the list but could be the best upside as well.
Now if you know anything about Lordstown Motors, you know the news isn’t good. First they were caught exaggerating the pre-orders for their electric truck, the Endurance. Then there was an SEC investigation into the company’s reporting and both the CEO and CFO had to resign. The company has even filed a going-concern letter with the SEC which means it might not have enough funding to survive.
It says it’s still scheduling for production this year or next and ready to scale up into making the trucks but this is a risky one here.
The shares are down 72% from the peak earlier this year and I’m actually surprised there’s not more short selling with only about 20% of the float borrowed and sold short. It’s still got nearly two-thirds, about 60% owned by institutionals, so that’s some support and sometimes, when all the news is bad, there’s only one way to go. This was almost a $5 billion company as recently as February so if they can get some funding or a strategic partner to begin production, the shares are going to pop.