10 Cheap Penny Stocks to Buy According to Hedge Funds

3. American Axle & Manufacturing Holdings Inc. (NYSE:AXL)

Forward P/E Ratio as of March 11: 10.25

Share Price as of March 11: $4.59

Number of Hedge Fund Holders: 28

American Axle & Manufacturing Holdings Inc. (NYSE:AXL) designs and manufactures driveline and metal forming technologies for a range of vehicles. Operating through its Driveline and Metal Forming segments, it provides essential components for electric, hybrid, and internal combustion vehicles. It serves markets across North America, Asia, Europe, and South America.

The company’s driveline business focuses on the components that transfer power from a vehicle’s engine or motor to its wheels and enables movement. This business is securing long-term stability through strategic contract wins, particularly in its next-generation full-size truck axles and power transfer units (PTUs). Recently, American Axle & Manufacturing Holdings Inc. (NYSE:AXL) announced a contract extension to supply PTUs for Ford’s Maverick and Bronco Sport, which builds upon previous contracts and totals over $10 billion in lifetime revenue for next-generation truck axles.

The company is set to combine with Dowlais and create a leading global driveline and metal-forming supplier. Dowlais is a global engineering group that specializes in automotive driveline technologies and powder metallurgy. This combination is expected to generate ~$12 billion in combined revenue and $300 million in run-rate synergies. The deal is expected to close in the Q4 2025.