In this article, we will take a look at the 11 best NYSE penny stocks to buy right now.
Small and medium-sized companies are the most affected by the direction of the economy and interest rates. With the US Federal Reserve cutting interest rates and the economy steering into a soft landing, the focus is slowly shifting towards penny stocks that remain well-positioned to be supercharged by improving macroeconomics.
It’s time to go all in into the small-cap rotation play after years of market domination by large-cap stocks. That’s the sentiment echoed by Citi U.S. equity strategist Scott Chronert, who believes small-cap stocks offer an affordable way of investing in value and are well-poised to generate long-term value.
READ ALSO: 10 Worst-Performing Growth Stocks in 2024 and 8 Best Micro Cap Stocks to Buy According to Analysts.
“Combined, investors could be paying a much lower multiple for a similar growth profile going forward,” he wrote. “Given post-pandemic peculiarities, the lack of a real cycle, and secular trends that support leaders, we still want to be owners of some Large Cap winners, but increasingly view Small/Mid Cap as an attractive alternative to the other 493. Said differently, we are more comfortable dipping down cap in search of fundamental winners and thematic expressions.”
Although small and mid-cap stocks have delivered above-average, double-digit gains over the past year, they look increasingly attractive amid a monetary policy change. The US Federal Reserve, commencing its monetary easing cycle, is making it easier for such companies to borrow money to expand their businesses. With their long-term prospects looking positive, investors are slowly taking note of their depressed valuation.
Similarly, the Russell 2000 ETF, which consists mainly of small and medium-cap companies, is up by 13% compared to a 22% gain for the S&P 500, affirming the massive room for gains among penny stocks.
“We continue to believe that these stocks have been unfairly punished (or ignored) given what we have viewed as a mismatch between the fundamental underpinnings and the group’s relative performance, and nothing has changed in that regard. It is only a matter of time before the fortunes of this group take a turn for the better” now that central bankers are cutting rates. Wrote BMO analysts’ research notes to investors.
Likewise, there is an influx of investments into small-cap exchange-traded funds amid growing optimism that the companies are fairly valued with tremendous upside potential. According to ETF journalist Dave Nadig in an interview on CNBC, money inflow into penny stocks might not necessarily be a rotation from winning growth trades. Instead, it is a diversification play as the focus shifts to getting broader exposure heading into year-end. The diversification strategy is part of a broader strategy of absorbing volatility
″ [Investors] are now, for the first time in ages, buying value, buying some of these defensive sectors, buying small caps. But they haven’t stopped buying the other things as well,” Nadig said in an interview on CNBC ETF Edge. “I think this is money coming in from that giant bucket of money markets that we know is sitting out there.”
Given that large-cap stocks continue to outperform the overall market, the focus on penny stocks is mostly on companies that are profitable. Given that 40% of the small-cap companies in the S&P 500 are unprofitable, investors are turning their attention to ETFs that exclude unprofitable companies as they optimize their return amid the current Bull Run.
The focus on penny stocks of profitable companies stems from the historical thesis that small caps often outperform large caps whenever the economy is expanding amid solid macroeconomics. Consequently, small-cap companies with exposure to emerging technologies such as artificial intelligence are becoming some of the most sought-after owing to their tremendous upside potential.
The best NYSE penny stocks to buy right now also stand out owing to their attractive valuations and the fact that they have a narrow expected earnings growth gap compared to large-cap companies. The fact that investors have to pay a much lower multiple for the penny stocks also makes them stand out on the risk-reward front.
Our Methodology
We used the Finviz screener to find stocks lists on the New York Stock Exchange that are trading below $5, as of October 31. We then selected stocks that analysts are bullish on and expect to generate significant long-term value due to their solid underlying fundamentals. Finally, we ranked the stocks in ascending order based on the number of hedge funds that hold stakes in them, as of Q2 2024.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. 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).
Best NYSE Penny Stocks to Buy Right Now
11. ACCO Brands Corporation (NYSE:ACCO)
Price as of October 31: $4.97
Number of Hedge Fund Holders: 24
ACCO Brands Corporation (NYSE:ACCO) is a company that makes and sells products for schools, offices, and technology use. They offer things like computer and gaming accessories, planners, and cleaning supplies. While the company remains profitable, it has come under pressure in 2024, going down by 20% year to date, underperforming the S&P 500, which is already up by more than 22%.
ACCO Brands Corporation (NYSE:ACCO) sentiments have come under pressure on the company, delivering declining sales, and its core business of selling a variety of office and school supplies was hurt by inflationary pressures. It delivered mixed third quarter results that were in line with expectations bolstered by improving sales trends. Net sales were down by 6% to $421 million mostly hurt by foreign exchange effects. On the other hand net income totaled $9.3 million or $0.09 a share. the company is on track to achieve $20 million in costs savings for the full year as part of its cost savings program
Due mostly to working capital management, ACCO Brands operating cash flow improved to $95.5 million in Q3 from $70.7 million the year before. By the end of the third quarter of the previous year, the company’s consolidated leverage ratio was 3.8x, and dropped to 3.5x.
Likewise, ACCO Brands Corporation (NYSE:ACCO)’s long-term outlook remains positive as the economic environment improves, as inflation drops and the Fed cuts interest rates. The company has embarked on a cost management strategy backed by strategic improvements in infrastructure and operational efficiencies expected to drive bottom-line growth and improved cash flow.
It remains one of the best NYSE penny stocks to buy now as it has increased its dividend payments by an average of 4.9% over the past three years. ACCO Brands Corporation (NYSE:ACCO) has already confirmed a $0.075 per share dividend, representing a $0.30 annualized dividend and a 6.24% yield.
10. Eventbrite Inc. (NYSE:EB)
Price as of October 31: $3.16
Number of Hedge Fund Holders: 25
Eventbrite Inc. (NYSE:EB) is a company best known for offering a platform for event management and ticketing services. The company has only started to pick up its pieces after facing significant challenges at the height of the COVID-19 pandemic, whereby there were movement restrictions. While the stock is down by about 70% from its all-time highs, its prospects are showing signs of improvement amid an increased desire for live experiences and reduced inflation that is fueling ticket sales.
Last year alone, Eventbrite Inc. (NYSE:EB) sold over 300 million tickets for over five million events while inflation was still high. With inflation dropping significantly below the 4% threshold in major economies, the company is on the cusp of booming business on ticket sales. The second quarter report was the clearest indicator that the company is back to robust growth.
Net sales were up by 7% in the quarter to $84.6 million despite gross ticket sales dropping from $890 million a year ago in the same quarter to $840 million. While Eventbrite Inc. (NYSE:EB) has lowered its revenue outlook for the entire year, it has taken the necessary steps to reduce its operating expenses, which is one of the ways of bolstering profit margins. Consequently, it is laying off 11% of its workforce, cutting 8% of its staff in the first half of last year.
Additionally, Eventbrite Inc. (NYSE:EB) has moved to capitalize on the growing market for live events despite a dip in ticket volume in the second quarter. It also remains in a robust cash position, allowing it to invest in technology as it focuses on long-term profitability. Given that the company’s revenue has grown by over 18% over the past 12 months, it remains in a phase of robust growth, which underscores why it is one of the best NYSE penny stocks to buy right now.
9. Kosmos Energy Ltd. (NYSE:KOS)
Price as of October 31: $3.82
Number of Hedge Fund Holders: 25
Kosmos Energy Ltd. (NYSE:KOS) is an independent energy company that explores, develops, and produces oil and gas. The stock has been under pressure on the overall oil market, with oil prices plunging below $80 a barrel and below $70 per barrel. Amid the underperformance, it remains one of the best NYSE penny stocks to buy now as it is positioning itself to take advantage of higher oil prices in future.
Kosmos Energy Ltd. (NYSE:KOS) has been increasing its oil and gas production with plans to hit 50% production growth. Its production levels hit 62,000 barrels daily in the second quarter, marking a 7% year-over-year growth. It plans to hit 90,000-a-barrel day production by the end of the year. Capital expenditure is expected to drop as production ramps up, allowing Kosmos to generate more earnings.
Additionally, Kosmos Energy Ltd. (NYSE:KOS) remains focused on achieving significant free cash flow of between $100 million and $150 million a quarter as it looks to reduce its debt levels.
8. Community Health Systems, Inc. (NYSE:CYH)
Price as of October 31: $4.32
Number of Hedge Fund Holders: 26
Community Health Systems, Inc. (NYSE:CYH) is a healthcare company that owns, leases, and operates general acute care hospitals in the United States. It also provides outpatient services at primary care practices, urgent care centers and ambulatory surgery centers. It is turning out to be one of the best NYSE penny stocks to buy right now, going by its 32% year-to-date gain, outperforming the overall market.
The 69-hospital system company delivered mixed third-quarter results dampened by significant increase in payer denials and coding downgrades by managed care plans. Nevertheless, revenues were slightly up from a year ago, in the same quarter, to $3.09 billion, attributed to higher hospital patient volumes and growth in the ambulatory surgery center. Revenue growth underscores the company’s efficacy in improving operations to generate more value. Community Health Systems, Inc. (NYSE:CYH) has invested in bed expansion initiatives and physician recruitment programs.
Additionally, it is one of the healthcare companies well positioned to benefit from the “two-midnight” rule that requires patients to be admitted whenever a clinical team believes they need care that lasts more than two midnights. Community Health Systems, Inc. (NYSE:CYH) is also progressing on a $1 billion divestiture plan as it looks to generate more shareholder value.
7. Anywhere Real Estate Inc. (NYSE:HOUS)
Price as of October 31: $3.76
Number of Hedge Fund Holders: 27
Anywhere Real Estate Inc. (NYSE:HOUS) is a company that provides residential real estate services. It offers relocation services and real estate brokerage while providing full-service title, escrow, and settlement services to consumers, real estate companies, corporations, and financial institutions. While the stock is down by more than 50% for the year, it remains well-positioned to be positively impacted by lower interest rates.
Anywhere Real Estate Inc. (NYSE:HOUS) should benefit from the improved optimism surrounding mortgage rates as the Federal Reserve lowers interest rates. The fact that the company is still free cash flow positive amid the housing market’s continued volatility underscores its potential to generate long-term value on improved conditions in the real estate sector. The business will produce significant FCF in a more normalized setting, affirming why it is one of the best NYSE penny stocks to buy right now,
Anywhere Real Estate Inc. (NYSE:HOUS) delivered solid second-quarter results, with revenues flat year over year at $1.7 billion as operating EBITDA increased $13 million year over year to $139 million. Its free cash flow in the quarter stood at $83 million, excluding a $20 million litigation settlement. The fact that transaction volume grew 3% year over year affirms resilience amid a challenging market environment.
6. Ardagh Metal Packaging S.A. (NYSE:AMBP)
Price as of October 31: $3.72
Number of Hedge Fund Holders: 29
Ardagh Metal Packaging S.A. (NYSE:AMBP) is one of the companies that supply consumer metal beverage cans used in end-use categories, including beer, carbonated drinks, juices, wine, and sparkling waters. Consequently, it is well-positioned to benefit from global economic growth, which results in enhanced consumer purchasing power.
With the global economy staying clear of recession, Ardagh Metal Packaging S.A. (NYSE:AMBP) delivered solid third-quarter results, with revenues increasing 1% yearly to $1.3 billion as adjusted EBITDA increased 15% to $196 million. The better-than-expected results came as the company registered a 2% increase in its can shipments, with 1% coming in the Americas and 2% in Europe.
Buoyed by improving macroeconomics, Ardagh Metal Packaging S.A. (NYSE:AMBP) has raised its full-year adjusted EBITDA guidance to between $650 and $660 million as it expects favorable volume/mix, cost recovery and lower operating costs for the entire year, Ardagh Metal Packaging expects shipment growth to be in the mid-single digits. The business also hopes that volume growth will fuel earnings growth in 2025 and 2026.
5. Hudson Pacific Properties, Inc. (NYSE:HPP)
Price as of October 31: $4.31
Number of Hedge Fund Holders: 29
Hudson Pacific Properties, Inc. (NYSE:HPP) is a real estate investment trust focusing on tech and media tenants. The stock has been under pressure over the past year amid broader industry struggles due to evolving workplace dynamics. The company suspending its quarterly dividend payment has also not gone well.
Despite the company’s sentiments taking a significant hit, its long-term outlook remains positive amid expectations of gradually strengthening the West Coast office markets. In an attempt to raise the quality of its real estate portfolio, which is needed to generate solid shareholder value, the company keeps looking into strategic options, such as asset sales.
Hudson Pacific Properties, Inc. (NYSE:HPP) continues to attract tenants with prebuilt space backed by a solid AI-related tech pipeline. It is also improving its office retention rates as it looks to safeguard its revenue base. Consequently, the company signed over 500,000 Square feet of office leases in the second quarter and expects strong leasing execution heading into year-end.
The company’s Price to Book ratio of 0.23 suggests that the stock might be undervalued, especially for gaining exposure in the real estate sector, which is poised to benefit from low interest rates. Despite suspending its quarterly dividend, Hudson Pacific Properties, Inc. (NYSE:HPP) has paid dividends for 15 consecutive years, and the stock currently yields 4.20%.
4. Altice USA Inc. (NYSE:ATUS)
Price as of October 31: $2.52
Number of Hedge Fund Holders: 32
Altice USA Inc. (NYSE:ATUS) is a communication services company that provides broadband communications and video services. It offers residential and business customers broadband, video, telephony, and mobile services. The stock has experienced a substantial decrease in value over the past year, and investors have been reacting to the company’s challenges in a highly competitive market.
The selloff can also be attributed to disappointing financial results. Revenue in the third quarter was down 3.9% year over year to $2.2 billion as residential revenue fell 5.6% to $1.7 billion. The company posted a net loss of $66.8 million.
Amid the disappointing results, Altice USA Inc. (NYSE:ATUS) registered a 47,000 increase in fiber net additions of which 73% was driven by migrations of existing customers further strengthening its revenue base. Its Fiber network penetration reached 16.6% at the end of the quarter from 10.8% a year ago. Altice USA Inc. (NYSE:ATUS) seeks to reach 3 million fibers by year-end as it focuses on operational improvements and financial discipline.
With more than 175,000 more passing anticipated in 2024, Altice USA Inc. (NYSE:ATUS) is also working to expand its network. Low churn rates and rising Net Promoter Scores further indicate the company’s emphasis on customer satisfaction. The company is also actively managing its debt maturity profile as part of its financial strategy, and it has taken action to pay off short-term maturities until 2027.
3. Clear Channel Outdoor Holdings, Inc. (NYSE:CCO)
Price as of October 31: $1.50
Number of Hedge Fund Holders: 32
Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) is an out-of-home advertising company that provides communication services. It provides advertising services through billboards, including bulletins and posters, as well as spectaculars, which are customized display structures with videos, multi-dimensional lettering and figures.
Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) delivered solid third-quarter results that affirm strong demand for its advertising services amid a challenging environment. In the quarter the company inked a significant 15 year contract for roadside advertising expanding its footprint in New York tri state area. Likewise it has started leveraging technology investments and expanded sales teams to enhance performance.
Revenue in the quarter was up 6.1% year over year to $559 million, affirming healthy demand from advertisers across all the key markets, including airports and Europe North segments. Revenue increased in most markets, most notably Miami, driven by increased demand and digital deployments. Digital revenue was up 8.4% to $106 million.
Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) is one of the best penny stocks to buy right now despite being pressured as advertisers increasingly recognize the value of its digital billboard platform, which reaches 70% of adults. The company is expanding its sales team as it looks to strengthen and diversify its revenue base.
Likewise, Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) increased its full-year 2024 consolidated revenue, Adjusted EBITDA and AFFO guidance, given the strength in Airports and Europe-North. It expects revenue of between $2.21 billion and 2.28 billion, representing growth of 4% to 7% year over year.
2. Nuvation Bio Inc. (NYSE:NUVB)
Price as of October 31: $2.34
Number of Hedge Fund Holders: 35
Nuvation Bio Inc. (NYSE:NUVB) is a clinical-stage biopharmaceutical company that develops therapeutic candidates for oncology. Its lead product candidate is NUV-868, a BD2 selective oral small molecule BET inhibitor that epigenetically regulates proteins that control tumor growth and differentiation. It is one of the best NYSE penny stocks to buy right now, going by its robust pipeline of drug candidates in various stages of development targeting unmet medical needs.
Taletrectinib is a candidate drug that has already shown competitive efficacy and safety in clinical trials on the treatment of non-small cell lung cancer. Nuvation Bio Inc. (NYSE:NUVB) is submitting a new drug application for the candidate drug as it aims to commercialize it as early as next year upon regulatory approval.
The positive clinical data indicate the strong potential for Taletrectinib to generate long-term shareholder value. Likewise, Nuvation Bio Inc. (NYSE:NUVB) addresses unmet medical needs in oncology and rare disease positions for long-term success.
1. Transocean Ltd. (NYSE:RIG)
Price as of October 31: $3.98
Number of Hedge Fund Holders: 42
Transocean Ltd. (NYSE:RIG) is one of the best NYSE penny stocks to buy right now to diversify an investment portfolio in the energy sector. The company provides offshore contract drilling services for oil and gas wells worldwide. It contracts mobile offshore drilling rigs, related equipment, and work crews to drill oil and gas wells.
While the overall energy sector has come under pressure owing to oil prices plunging below the $70 a barrel level, Transocean Ltd. (NYSE:RIG) continues to record booming business for its services. The company’s drilling fleet is committed mainly through 2025, with a potential contract extension to 2026, affirming its revenue base.
Additionally, it maintains a positive outlook for its offshore drilling market as it anticipates strong growth driven by increased global oil consumption. Transocean Ltd. (NYSE:RIG) keeps landing big contracts, like a $123 million deal with Reliance Industries Limited to drill six wells offshore India and a $232 million deal with BP for U.S. Gulf of Mexico operations.
In addition, Transocean Ltd. (NYSE:RIG) is in talks to merge with Seadrill Limited as they look to capitalize on a rebound in oil and gas exploration in the future. The merger will strengthen Transocean’s competitive edge and enhance its operational efficiency at the top of the competitive oil-field services market.
While we acknowledge the potential of RIG as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than RIG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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