2 Stocks Under $20: Immunitybio and Lemonade

Both stocks are ripe for a short squeeze

Deputy Editor
Mar 20, 2024 at 2:55 PM
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Depending on who you ask, a recession is either right around the corner, or the stock market is ready to rattle off a seismic bull run. As always, the answer is probably something in the middle of those two extremes. But due to the uncertainty surrounding the Federal Reserve’s rate cuts, investors are stuck in a holding pattern until more data defines the country's fiscal path.

Since bargains become popular when times are uncertain, we’d like to introduce a new weekly segment: Cheap Seats. Every week, we will profile two stocks under $20 with a market capitalization of at least $2 billion.

These are not outright "buy" recommendations, but interesting names – with cheap overhead – that are worth adding to your watch list. This week, we're taking a look at biotech stock Immunitybio Inc (NASDAQ:IBRX) and Lemonade Inc (MYSE:LMND)

IBRX is surging today, following the company's better-than-expected earnings report -- up 10.5% to trade at $6.07 at last glance, though still sitting at a reasonably priced $6. The stock is a far cry from its record high of $45.42 on Feb. 22, 2021, and has been in and out of penny stock territory for the past two years.

In the short term, there is plenty of short interest that could lend itself to a short squeeze, as the 51.55 million shares sold short represent 39.5% of IBRX's available float. There is plenty of space for bull notes as well, as there are only two analysts in coverage.

The shares of Lemonade are also on the rise today, up 4.8% to trade at $16.49 at last glance. Notably, the insurance company's business model strongly centers around the use of artificial intelligence (AI), a boon for many stocks this year. Since last March, the equity is up 21.9%. Lemonade stock also has plenty of pessimism that could unwind, as short interest represents 31.2% of the stock's available float. 

When weighing in on LMND, options look like a good way to go. The stock is seeing well-priced premium at the moment, per its Schaeffer's Volatility Index (SVI) of 56% ranks in the low 3rd percentile of its annual range. 

 

 

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