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 than average shares available. But you won’t find low float stocks on the major exchanges.
To be listed on the New York Stock Exchange, companies need to have at least 1.1 million publicly traded shares. And the Nasdaq requires at least 1.25 million shares be made available. This is to ensure a certain level of liquidity. That can reduce volatility. It also reduces the size of spreads. And all of this can help prevent some level of market manipulation by bad actors.
This is why low float stocks are found on over-the-counter (OTC) exchanges. In order to calculate this figure, take the total number of stocks and subtract restricted stocks and closely held shares.
Restricted stocks of a company are unregistered shares which are issued to insiders. This 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, there are extra steps that need to be taken in order to be compliant with the Securities and Exchange Commission.
The circumstances around closely held shares are slightly less common. But this is a situation where a company’s common shares are mostly owned by an individual or small collective of controlling stockholders.
What we’re left with after subtracting these two figures from the total number of authorized shares is floating shares actually available for trading. The table below represents 20 low float stocks with some of the fewest number of shares available.
Low Float Stocks with a Minimum Market Cap of $100,000
|Ticker||Short Name||Equity Float|
|GLAE US Equity||GlassBridge Enterprises||16.33k|
|CMTX US Equity||Comtex News Network||15.79k|
|CHZQ US Equity||China Zhong QI Holdings||13.45k|
|WFHG US Equity||World Financial||13.26k|
|GGLT US Equity||Giant Group Ltd.||11.16k|
|CBEVD US Equity||Spirits Capital Corp.||11.04k|
|FPCG US Equity||First Physicians Capital||9.83k|
|SWIOU US Equity||Southwest Iowa Renewable||8.82k|
|BPCP US Equity||Bishop Capital Corp.||8.82k|
|AVOA US Equity||Avoca LLC||8.31k|
|CRDE US Equity||Cardinal Ethanol LLC||8.12k|
|SBBG US Equity||Seibels Bruce Group||7.82k|
|BBLR US Equity||Bubblr Inc.||6.71k|
|VCON US Equity||Vicon Industries Inc.||5.08k|
|MAJJ US Equity||Michael Anthony Jewelers||4.17k|
|HEOL US Equity||Highwater Ethanol||4.13k|
|JUHL US Equity||Juhl Energy Inc.||3.67k|
|ICTPU US Equity||American Restaurant Partners||2.70k|
|VRTB US Equity||Vestin Realty Mortgage||2.34k|
|PCOA US Equity||Pendrell Corp.||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 nano-cap stocks. For reference a nano-cap 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, 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. And it’s most likely one that has more of a penchant for the big gamble than someone with a long-term investment strategy 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 teetering 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 right there is why price swings of it are a whole lot more modest.
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About Matthew Makowski
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.