We recently published a list of 10 Low Price High Volume Stocks to Buy Now. In this article, we are going to take a look at where SNDL Inc. (NASDAQ:SNDL) stands against other low price high volume stocks to buy now.
Cheap stocks or stocks typically priced under $10, can be attractive for investors looking to make quick gains in shares. With a limited amount of investment, a larger number of shares can be acquired which provides greater potential for gains in case the stock prices rise. Investing in low-price stocks can be tempting but might not always be the best approach with more of these stocks being high risk with greater quality concerns. While investors can enjoy greater liquidity of their funds, these low-priced stocks can be glaring signs of underlying threats in the company’s outlook.
In the fluctuating world of stock trading, especially with the volatile markets in the current scenario, low-priced high volume stocks can present unique opportunities for investors. While the cheap price offers growth potential and scope for appreciation, high trading volumes indicate market interest. These stocks are typically associated with small-cap or micro-cap companies and have garnered attention within the investing community, especially among retail investors seeking high-growth opportunities. They are known for their high volatility and liquidity. Low-priced stocks that trade at high volume, can mitigate some of the risks since they enable investors to enter and exit with ease and capitalize on short-term opportunities. The affordability of these stocks allows investors to diversify their portfolios making them accessible to a broader range of market participants. The less efficient market for low-priced stocks provides opportunities to identify undervalued companies before they gain broader recognition. Additionally, high trading volume indicates strong investor interest, driving price momentum and leading to substantial returns.
A lot of these stocks typically operate in sectors with high interest such as renewable energy, clean-tech, and biotechnology that allows investors to tap into the market momentum of these sectors. In 2023, 60% of the stocks under $5 were operating in these sectors. Some of these sectors have seen unexpected developments in recent times due to changing investor preferences, regulations, and market innovations. Sectors like clean energy and biotechnology have seen some interesting developments driven by technological advancements and regulatory push. While the clean-tech companies have benefited from market incentives, biotech firms have experienced breakthroughs in healthcare innovation and drug developments. These developments have been beneficial for small players in the industry, but the market is still fraught with risks for low-priced stocks.
The recent market scenario has shown that volatile stocks have been posed with a number of macroeconomic challenges and shifting investor sentiment. A market marked by rising interest rates, inflation concerns, and geopolitical tensions poses a challenging environment for high-risk stocks. For instance, the collapse of several ‘meme-stocks’ in 2023 that previously soared due to social-media push, is a clear sign of the high risks involved in such darling stocks. With many low-priced stocks experiencing high price fluctuations, a lot of these stocks lose as much as 50% of their value within weeks. The recent stock plunges across the market due to the DeepSeek news, especially for AI startup stocks, is another cautionary example.
Therefore, investing in low-priced, high-volume U.S. can sometimes deter even experienced investors. Extreme volatility is one of the primary concerns. Low-priced stocks (under $5) often experience daily price swings of 5% or more, compared to less than 1% for large-cap stocks. These stocks can experience dramatic price swings within short periods, often driven by market sentiment or speculative trading rather than fundamental value. Especially during market downturns or when unfavorable news emerges, the stocks can prove to be extremely volatile and increase the risk of losses. They can be susceptible to market manipulation, such as “pump and dump” schemes, where prices are artificially inflated before being sold off, leaving investors with unexpected losses. Another challenge is the lack of avenues to perform thorough due diligence due to less transparency and limited information available for many small-cap or micro-cap companies.
While these stocks come with higher risks and their own set of challenges, their potential for outsized gains makes them a compelling option for risk-tolerant investors. Investors can leverage the unique advantages of low-priced, high-volume stocks to achieve significant portfolio growth by conducting thorough research and maintaining a disciplined approach. We have identified some low-price, high volume stocks that could be great buying opportunities for investors right now.
Our Methodology:
To arrive at our list of low-price, high volume stocks to buy now, we have screened the most active current stocks on the basis of price criteria and volume criteria (focusing on stocks under $10). We have then assigned scores for other market criteria such as market sentiments and growth. Our list is sorted on the basis of stock price and we have also considered the number of hedge fund holders for each stock.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
A close-up shot of a cannabis plant, showing its intricate details.
SNDL Inc. (NASDAQ:SNDL)
Price: $1.86
Trading Volume: 1,551,372
No. of hedge fund owners: 10
A key player in the cannabis and liquor retail sectors, SNDL Inc. (NASDAQ:SNDL), operates in a dynamic industry landscape that warrants a growth strategy mindset. The company crafts small-batch cannabis in its state-of-the-art indoor facilities. It is one of the best low-priced stocks on our list.
The cannabis industry is often dealing with fluctuating trends and is greatly affected by factors such as changing regulations and consumer preferences. While the US looks at potentially reclassifying cannabis to a Schedule III substance by the Drug Enforcement Administration (DEA), it could significantly impact the industry’s financial and strategic dimensions. Furthermore, as the timeline remains uncertain, regulatory ambiguity continues to persist. While the challenges persist, the industry predicts that U.S. cannabis sales could surpass $50 billion in 2025. Companies like SNDL Inc. (NASDAQ:SNDL) are distinctly placed to capitalize on the growing industry if they are able to navigate the dynamic environment effectively.
Potentially, the favorable regulatory updates could also offer benefits to the notable players who have crafted a unique position in the market. SNDL Inc. (NASDAQ:SNDL) too is positioned to take advantage of the financial benefits through market expansion opportunities and financial incentives.
The company has been proactively shaping its strategic approach to ride the uncertainties of a highly evolving industry. It acquired all outstanding shares of Nova Cannabis Inc. in October 2024, strengthening its retail footprint and enhancing its market presence. This strategic move underscores the company’s commitment to expand its influence in the Canadian cannabis retail sector. SNDL Inc. (NASDAQ:SNDL) reported good financial performance in Q3 of 2024, and the company was on track to achieve positive free cash flow for the calendar year.
Again, the high trading volume of SNDL Inc. (NASDAQ:SNDL) stocks suggests heightened investor interest and liquidity, while it is also an attractive option for investors seeking exposure to the cannabis sector.
Overall, SNDL ranks 4th on our list of low price high volume stocks to buy now. While we acknowledge the potential for SNDL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SNDL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.