In this piece, we will take a look at the 11 stocks under $25 to buy now. If you want to skip our overview of the stock market, some recent news, and the broader investment climate, then take a look at 5 Stocks Under $25 To Buy Now.
With 2024 coming to a close, the market has seen it all. 2023 started with worries of doom and gloom everywhere as investors were still gathering their footing after rapid interest rate hikes by the Federal Reserve, historic inflation in the wake of the Russian invasion of Ukraine, monetary policy tightening after the fiscal largess during the coronavirus pandemic, and predictions of a recession.
However, within months, investors were again left catching up as the wave around artificial intelligence (A.I.) kicked off and sent mega cap technology stocks to the Moon. This injected optimism in the market, but that was soon tarnished as regional banking crisis seemed to bring everyone’s worst fears true. Multiple banks failed, sending the U.S. dollar to low levels even as the Federal Reserve had given no indication of cutting rates anytime soon.
Despite the banking turmoil the market went on and set new records for performance during the first half. This left investors worrying whether the second half would see a correction particularly if the economy lived up to expectations of slowing down. Yet, economic data continued to show that growth had not stopped.
Now, as 2023 is ending, the market is more confident about a substantial reduction in interest rates in 2024. This is because inflation has continued to drop, and the Fed is extremely cautious about further interest rate hikes after crisis level yields in the bond market. The first week of December is now seeing investors not wonder whether rates will drop, but instead see how far they can drop next year.
Fed chairman Jerome Powell ended November by stating that the risk of not raising interest rates too much compared to keeping them low and letting inflation spiral out of control is now more balanced. Data from the London Stock Exchange Group (LSEG) shows that Fed fund futures, which are contracts that are traded and allow financial managers to hedge against the fluctuations in the daily federal funds effective rate (FFER), now expect the Fed Funds rate to sit at 4.53% by July 2024 end – pricing in more than a hundred basis points of cuts from current interest rate levels.
This sentiment about interest rates falling is also mirrored by experts. For instance, the teams at Bank of America Corporation (NYSE:BAC) believe that starting from June 2024, the Fed will start to cut interest rates by 25 basis points per quarter. If this bears fruit, then it will enable Chair Powell and his team to ensure that high rates adequately make their way through the economy and the rate is not too high for too long to deliver long term economic damage. Right now, the Fed funds rate in the U.S. is 5% – 5.25%, so if there are three 25 basis point cuts per quarter starting from the second quarter of 2024, then the final rates at the end of next year could be 4.25% – 4.50%.
However, Wall Street is far from having reached a consensus about what the Fed might do next year. This is because while Bank of America believes that rate cuts are just around the corner, The Goldman Sachs Group, Inc. (NYSE:GS) is on the other side of the debate. Goldman is the most pessimistic bank out of the bunch, as it believes that the first interest rate cuts will take place in the fourth quarter of 2024. The bank’s condition for the first rate cuts is inflation falling to 2.5% or below – a sentiment that also matches the Fed’s wariness of not reducing rates by too much, too fast.
For what it’s worth, Goldman Sachs was also the rare bank that correctly predicted earlier this year that the U.S. would avoid a recession. So perhaps the bank’s analysts have discovered the proverbial crystal ball. Goldman’s stock market predictions for 2024 outlined that the S&P 500 should rise to 4,700 points, for a little over 100 points of gains over the latest closing of 4,594 points.
With these details in mind, let’s take a look at some cheap stocks under $25. Some notable names are Macy’s, Inc. (NYSE:M), Transocean Ltd. (NYSE:RIG), and Kyndryl Holdings, Inc. (NYSE:KD).
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Our Methodology
For this article, we first made a list of stocks trading under $25 and then ranked them by the average analyst recommendation. Then, the top 30 were further sorted by the number of hedge funds that had bought their shares as of Q3 2023. Out of these, the top stocks to buy under $25 are as follows.
Stocks Under $25 To Buy Now
11. Urban Edge Properties (NYSE:UE)
Latest Share Price: $17.34
Number of Hedge Fund Investors In Q3 2023: 19
Urban Edge Properties (NYSE:UE) is a real estate investment trust headquartered in New York City. It manages retail real estate properties, and the firm has beaten analyst EPS estimates in three out of its four latest quarters. The stock is rated Buy on average and analysts have set an average share price target of $19.50.
During Q3 2023, 19 out of the 910 hedge funds part of Insider Monkey’s database had held a stake in Urban Edge Properties (NYSE:UE). Dmitry Balyasny’s Balyasny Asset Management was the firm’s largest shareholder in our database as it owned 2.5 million shares that are worth $39 million.
Just like Transocean Ltd. (NYSE:RIG), Macy’s, Inc. (NYSE:M), and Kyndryl Holdings, Inc. (NYSE:KD), Urban Edge Properties (NYSE:UE) is a top stock under $25 with strong hedge fund and analyst sentiment.
10. World Kinect Corporation (NYSE:WKC)
Latest Share Price: $21.50
Number of Hedge Fund Investors In Q3 2023: 19
World Kinect Corporation (NYSE:WKC) is an oil marketing company that sells fuel to industrial users. During its third quarter, the firm earned $12.2 billion in revenue for a 22% annual drop and a profit of $35 million marked an 18% drop.
Insider Monkey’s third quarter of 2023 survey covering 910 hedge funds revealed that 19 were the firm’s shareholders. World Kinect Corporation (NYSE:WKC)’s biggest hedge fund investor is John Overdeck and David Siegel’s Two Sigma Advisors as it owns $8.1 million worth of shares.
9. The Shyft Group, Inc. (NASDAQ:SHYF)
Latest Share Price: $11.52
Number of Hedge Fund Investors In Q3 2023: 20
The Shyft Group, Inc. (NASDAQ:SHYF) makes and sells truck bodies, vans, and other associated products and vehicles. October 2023 was an eventful month for the firm as it successfully executed a leadership transition plan and appointed a new chief executive officer.
For their September quarter of 2023 shareholdings, 20 out of the 910 hedge funds surveyed by Insider Monkey had bought and owned The Shyft Group, Inc. (NASDAQ:SHYF)’s shares. D. E. Shaw’s D E Shaw was the largest shareholder among these due to its $12.4 million stake.
8. Veradigm Inc. (NASDAQ:MDRX)
Latest Share Price: $12.13
Number of Hedge Fund Investors In Q3 2023: 22
Veradigm Inc. (NASDAQ:MDRX) is a technology company that provides hospitals and healthcare establishments with products to manage their operations. It expanded its product portfolio in November 2023 after adding digital payments to the mix.
By the end of this year’s third quarter, 22 out of the 910 hedge funds tracked by Insider Monkey were the firm’s investors. Veradigm Inc. (NASDAQ:MDRX)’s biggest investor is Steve Cohen’s Point72 Asset Management as it has invested $49.4 million in the company.
7. The Children’s Place, Inc. (NASDAQ:PLCE)
Latest Share Price: $23.37
Number of Hedge Fund Investors In Q3 2023: 23
The Children’s Place, Inc. (NASDAQ:PLCE) is a clothing company that focuses on selling clothes for kids. It has a retail presence in the U.S., Canada, and Puerto Rico. A high inflationary environment has made its mark on the company’s financial statements, as it has beaten analyst EPS estimates in only two out of its four latest quarters.
Insider Monkey dug through 910 hedge funds for their shareholdings during 2023’s September quarter and found that 23 had held a stake in The Children’s Place, Inc. (NASDAQ:PLCE). Paul Marshall and Ian Wace’s Marshall Wace LLP was the largest shareholder courtesy of its $15.2 million investment.
6. SolarWinds Corporation (NYSE:SWI)
Latest Share Price: $11.85
Number of Hedge Fund Investors In Q3 2023: 23
SolarWinds Corporation (NYSE:SWI) is an American technology company that enables businesses to manage their information technology infrastructure, operations, and business processes. It beefed up its database management products in November 2023, after announcing upgrades that allow database managers to determine the effects of deploying new code.
23 out of the 910 hedge funds part of Insider Monkey’s Q3 2023 database had invested in the company. SolarWinds Corporation (NYSE:SWI)’s biggest hedge fund investor is Jim Davidson, Dave Roux, and Glenn Hutchins’s Silver Lake Partners through its $580 million stake.
Macy’s, Inc. (NYSE:M), SolarWinds Corporation (NYSE:SWI), Transocean Ltd. (NYSE:RIG), and Kyndryl Holdings, Inc. (NYSE:KD) are some top rated stocks under $25.
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Disclosure: None. 11 Stocks Under $25 To Buy Now is originally published on Insider Monkey.