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Financial Literacy

Low Float Stocks: 20 Companies With Very Limited Shares Available

The number of shares of a stock available to traders is known as “floating stock.” So, naturally, low float stocks are securities with fewer shares available than usual. But you won’t find low float stocks on the major exchanges.

low float stocks featured on the big board.

To be listed on the New York Stock Exchange, companies need to have at least 1.1 million publicly traded shares. The Nasdaq requires at least 1.25 million shares be made available. This is to ensure a certain level of liquidity. It can reduce volatility, the size of spreads and the level of market manipulation by bad actors.

This is why low float stocks are found on over-the-counter (OTC) exchanges. To calculate a company’s floating stock, take the total number of stocks and subtract restricted stocks and closely held shares.

Restricted stocks of a company are unregistered shares that are issued to insiders. These insiders can include corporate executives and directors within the company as well as corporate affiliates. These shares are not able to be transferred. In order for them to be traded, extra steps must be taken to ensure compliance with the Securities and Exchange Commission.

Closely held shares are slightly less common. If a company’s shares are owned mostly by an individual or a small group of controlling stockholders, those shares are considered closely held.

After subtracting restricted stocks and closely held shares from the total number of authorized shares, we’re left with the number of floating shares actually available for trading. The table below represents 20 low float stocks with some of the fewest shares available.

Low Float Stocks With a Minimum Market Cap of $100,000

TickerNameEquity float (in thousands)
GLAEGlassBridge Enterprises16.33
CMTXComtex News Network15.79
CHZQChina Zhong QI Holdings13.45
WFHGWorld Financial13.26
GGLTGiant Group Ltd.11.16
CBEVDSpirits Capital Corp.11.04
FPCGFirst Physicians Capital9.83
SWIOUSouthwest Iowa Renewable8.82
BPCPBishop Capital Corp.8.82
AVOAAvoca LLC8.31
CRDECardinal Ethanol LLC8.12
SBBGSeibels Bruce Group7.82
BBLRBubblr Inc.6.71
VCONVicon Industries Inc.5.08
MAJJMichael Anthony Jewelers4.17
HEOLHighwater Ethanol4.13
JUHLJuhl Energy Inc.3.67
ICTPUAmerican Restaurant Partners2.70
VRTBVestin Realty Mortgage2.34
PCOAPendrell Corp.0.756

What to Know About Companies With Low Float

For the most part, the companies listed above are very small companies. Some would barely register as nanocap stocks. For reference, a nanocap stock is a company with a total market capitalization of less than $50 million. So an investment in any of the companies on our list of low float stocks would be a very speculative gamble.

Also, any potential investors should prepare for a little sticker shock. Some of these low float stocks have price tags that would make investors in Amazon (Nasdaq: AMZN) blush. We’re looking at you, Pendrell Corporation. But that’s par for the course. It doesn’t take much to move the price of a stock when so few shares are available.

This is one of the reasons institutional investors avoid low float stocks. There can be an extremely wide bid-ask spread. And the lower amount of liquidity means purchases of a large number of these stocks can have a sizable impact on the share price, which – for the most part – might reward company insiders more than the investor. This is based on the assumption that many of these low float stocks are held mostly by insiders and in employee stock ownership plans.

Nonetheless, these low float stocks can be of interest to a very specific type of investor. They’re more likely someone with a penchant for a big gamble than someone with a long-term investment strategy who’s thinking in terms of retirement. But hey, to each their own.

The Bottom Line on Low Float Stocks

There can be a lot of risk associated with low float stocks, especially when there are merely a few thousand shares available. It really wouldn’t take a whole lot of interest to send these stocks careening in any given direction… simply because there is such a small supply.

To put this into context, the number of floating shares of General Electric (NYSE: GE) is a little more than 3 billion. And that is why its price swings are a whole lot more modest.

If you’d like to learn more about OTC markets and how to apply smart speculation strategies, we suggest signing up for the Monument Traders Alliance e-letter. In it, Pro Traders Bryan Bottarelli and Karim Rahemtulla guide investors toward potentially lucrative investment opportunities that can be found in every corner of the markets. All you have to do is enter your email address in the box below to get started.


About

Matthew Makowski is a senior research analyst and writer at Investment U. He has been studying and writing about the markets for 20 years. Equally comfortable identifying value stocks as he is discounts in the crypto markets, Matthew began mining Bitcoin in 2011 and has since honed his focus on the cryptocurrency markets as a whole. He is a graduate of Rutgers University and lives in Colorado with his dog, Dorito.

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