According to a report by Charles Schwab published on December 9, the U.S. economy and stock market are entering 2025 from a position of relative strength, but the risks of volatility, particularly those related to policy, are significantly higher compared to the previous year. This uncertainty is largely driven by the policy proposals of President-elect Donald Trump, whose unconventional governing style and fluid policy positions have made forecasting their impact on domestic and global conditions extremely challenging. The report highlights that Trump’s policy proposals, which include lower taxes and reduced regulations, are generally seen as growth-positive. However, these are offset by proposals for higher tariffs on imported goods and mass deportations of illegal immigrants, which are generally considered stagflationary, at least in the short term.
In terms of the stock market, the report suggests that while equities can perform well from the beginning to the end of the year, the volatility is likely to be higher in 2025 compared to 2024. The S&P 500 is currently above its 50 and 200-day moving averages, which historically has been a positive indicator for future performance. However, the report cautions that after a year with 57 record highs, the median gain in the following year has historically been around 5.8%, suggesting a potential for a step back in performance. The report also notes that the S&P 500’s 5-year normalized P/E ratio is quite stretched, indicating a product of market enthusiasm but not necessarily a near-term risk.
For small caps, the report notes that the Russell 2000 has struggled in the current bull market due to higher interest rates and weaker profit profiles. The report suggests that profitable small caps could perform well if economic growth holds and the Fed takes a gradual approach to rate cuts, but the index as a whole might continue to face challenges if earnings growth does not improve.
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U.S. Stocks in 2025: Growth, Risks, and Opportunities
In an interview with Bloomberg on December 24, Jonathan D. Corpina, Senior Managing Partner at Meridian Equity Partners, discussed his outlook for U.S. stocks in 2025. Corpina noted that the market is finishing the year strong, supported by a resilient economy and key events such as the election and rate cuts being out of the way. He believes that the market will continue to move higher in 2025, though it will take a few quarters for the new administration to implement new policies and procedures.
Corpina also addressed investor expectations for strong double-digit earnings growth for S&P 500 companies, suggesting that while the bar is set high, it’s important to manage expectations. He emphasized that the economy remains fragile, and companies are still adjusting to the new environment and administration. He advised a cautious approach, noting that there are many uncertainties that could impact the market in the coming year. On the U.S. financial sector, Corpina is optimistic. He anticipates a lot of M&A activity and IPOs in 2025, driven by a pro-business administration.
While the U.S. economy and stock market are entering 2025 with a foundation of relative strength, the landscape remains fraught with uncertainty. With that in context, let’s take a look at the 10 best low priced stocks to invest in now.
A stock market graph. Photo by Alesia Kozik on Pexels
Our Methodology
To compile our list of the 10 best low priced stocks to invest in now, we used Finviz and Yahoo stock screeners to find the 50 largest companies trading below the price of $10 as of December 24. We then used Insider Monkey’s Hedge Fund database to rank 10 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? 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).
10 Best Low Priced Stocks to Invest in Now
10. TAL Education Group (NYSE:TAL)
Number of Hedge Fund Investors: 29
Stock Price as of December 24: $9.88
TAL Education Group (NYSE:TAL) is a leading education technology company dedicated to providing high-quality, innovative learning solutions for students across China. The company offers tutoring services across various academic subjects for students from preschool to high school. With a strong focus on both online and offline enrichment programs, TAL Education Group (NYSE:TAL) has established itself as a pioneer in the education technology sector.
TAL Education Group (NYSE:TAL) is continuously refining and expanding its learning programs to deliver high-quality educational experiences. The company’s Peiyou small-class offerings, which have been a significant driver of revenue, are being enhanced through standardized lecturing approaches and interactive, student-centric learning experiences. TAL Education Group (NYSE:TAL) is also investing in the recruitment and training of lecturers to ensure consistent service quality. Despite the growing market competition, TAL Education Group (NYSE:TAL) remains focused on maintaining a balance between growth and operational efficiency, carefully managing its learning center network and optimizing key metrics such as utilization, refund, and retention rates.
TAL Education Group (NYSE:TAL) has launched several new AI-powered devices, including the Xbook, a lower ASP device designed for daily practice and learning needs. These devices feature advanced AI capabilities, such as MathGPT for accurate feedback on handwritten answers and a comprehensive content library. TAL Education Group (NYSE:TAL) is also exploring value-added services to enhance user engagement and monetize its growing user base while ensuring that these services do not compromise the user experience. The company’s investment in R&D is not limited to hardware and software but extends to content development, aligning with new curriculum standards to provide up-to-date and relevant learning materials.
9. NexGen Energy Ltd. (NYSE:NXE)
Number of Hedge Fund Investors: 32
Stock Price as of December 24: $6.91
NexGen Energy Ltd. (NYSE:NXE) is a Canadian uranium exploration and development company, primarily focused on advancing its flagship Rook I Project in Saskatchewan’s Athabasca Basin, one of the world’s richest uranium districts. The company has established itself as a key player in the global nuclear energy sector.
NexGen Energy Ltd. (NYSE:NXE) is making substantial progress on the Rook 1 Project, which is advancing through detailed engineering, procurement, training, and development. The company has successfully completed the installation and commissioning of a solar power plant at its existing camp. The mine hoist equipment, which transports people and materials between the surface and the underground mine has been ordered, and the shaft award is progressing. Additionally, NexGen Energy Ltd.’s (NYSE:NXE) exploration activities at Patterson Corridor East (PCE) have delivered exceptional results, with multiple high-grade intersections confirming the potential for significant new discoveries.
NexGen Energy Ltd. (NYSE:NXE) is well-positioned to capitalize on the growing global demand for uranium, driven by the critical role of uranium in meeting the energy demands of data centers and AI workloads along with the increasing need for reliable energy to support the transition to a low-carbon economy. This new and exponential growth in demand is further compounded by the fragility of existing uranium supply chains, with 70% of the world’s mine supply hosted by countries or influenced by those in military conflict.
