12 Best Long-Term Penny Stocks to Buy According to Hedge Funds

7. SelectQuote, Inc. (NYSE:SLQT)

Stock Price: $3.72

5-Year Sales Growth: 34.42%

Number of Hedge Fund Holders: 13

SelectQuote, Inc. (NYSE:SLQT) ranks 7th on our list of best long-term penny stocks to buy according to hedge funds. It is an insurance and healthcare services company. The company uses technology to connect consumers directly with insurance products, allowing them to compare options from multiple providers easily. It operates through a series of business lines including SelectQuote Senior, SelectQuote Healthcare Services, SelectQuote Life, and SelectQuote Auto and Home.

The company has implemented highly targeted lead-sourcing strategies for policy origination, which have proven effective during the Annual Enrollment Period (AEP). This approach is critical as SelectQuote aims to optimize cash flow and improve its balance sheet. Moreover, it is also leveraging AI tools to enhance operational efficiency by screening and prioritizing calls, thus simplifying processes behind the scenes. These effective marketing strategies resulted in a 26% year-over-year increase in revenue, totaling $292.3 million for the first quarter of fiscal 2025, up from $232.7 million in the same period last year.

In addition to revenue, the company also improved its adjusted EBITDA by reducing the loss by nearly $10 million, from negative $11.4 million last year to negative $1.7 million during the current fiscal year. On the bright side, its healthcare segment saw membership grow by 64%, reaching over 86,000 members. This segment has now recorded six consecutive quarters of profitability, demonstrating strong operational execution. Management anticipates continued success driven by its strategic initiatives in both Senior distribution and Healthcare Services.