11 Best Fundamentally Strong Penny Stocks to Buy Now

2. Kosmos Energy Ltd. (NYSE:KOS)

Number of Hedge Fund Holders: 27

Kosmos Energy Ltd. (NYSE:KOS) is an independent oil and gas exploration and production company focused on offshore assets in key regions including West Africa, the US Gulf of Mexico, and Latin America. The company’s portfolio includes both producing assets and high-impact exploration opportunities, with core operations in Ghana, Equatorial Guinea, and the Gulf of Mexico. KOS specializes in deepwater and ultra-deepwater projects, operating under production-sharing contracts and licenses in partnership with national oil companies and other operators. The company ranked 8^th on our recent list of 10 Most Oversold Penny Stocks to Buy According to Analysts.

Kosmos Energy Ltd. (NYSE:KOS) has positioned itself with a unique portfolio of world-scale oil and gas assets, characterized by a growing 2P reserve life of more than 20 years. The company’s oil assets feature low operating costs and high cash margins, while gas assets are positioned to deliver growth in revenue with increasing margins. For 2025, KOS expects increased production and reduced capital expenditure to drive an attractive free cash flow yield, with total CapEx expected to fall significantly from over $800 million in 2023-2024 to $400 million in 2025, representing a reduction of over 50%.

Kosmos Energy Ltd. (NYSE:KOS) is targeting a reduction in annual overhead of around $25 million by the end of 2025, primarily through reducing contractors and external consultants. A significant milestone was achieved with the GTA project, which saw the first gas production in the late fourth quarter of 2024 and the first LNG production in early February 2025, with the first cargo lifting expected shortly. The company’s financial strategy prioritizes debt paydown until reaching a leverage goal of below 1.5x at mid-cycle oil prices, after which they will balance cash between further debt reduction and shareholder returns. Year-end 2024 reserves of 530 million barrels of oil equivalent represent a reserve-to-production ratio of 22 years, which significantly differentiates KOS from its peers. Including the extensive resource base, the reserve life extends to nearly 30 years, highlighting substantial organic growth potential for sustained cash generation. With 27 hedge funds owning the stock, KOS is one of the best fundamental stocks to buy now.