12 Best One Dollar Stocks to Buy According To Hedge Funds

Published on January 27, 2023 at 9:32 am by Hamna Asim in Hedge Funds, News

In this article, we discuss 12 best one dollar stocks to buy according to hedge funds. If you want to see more stocks in this selection, check out 5 Best One Dollar Stocks to Buy According To Hedge Funds.

In April 2021, younger traders – the millennials and Gen-Z – poured heavily into meme stocks as the economy reopened after the peak of the COVID-19 pandemic. AMC Entertainment Holdings, Inc. (NYSE:AMC) and GameStop Corp. (NYSE:GME) were some of the top trades of retail investors. Although these investors were very committed to the likes of Tesla, Inc. (NASDAQ:TSLA), Apple Inc. (NASDAQ:AAPL), and Amazon.com, Inc. (NASDAQ:AMZN), their portfolios had penny stocks in abundance too, as per data from nearly 3 million trading accounts collected by Apex Clearing. Similarly, blockchain and crypto mining penny stocks were also on the rise during that time period, propelled to the limelight by internet forums like Reddit.

During 2020, Robinhood investors were more invested in penny stocks than the regular retail investors. Emmanuel Cau, an equity strategist with Barclays, told CNBC in June 2020 that investors were piling into penny stocks “given the low absolute share prices, their chances of higher return from such beaten down stocks are high, irrespective of their fundamentals.”

It looks like the year 2023 is going to be a good one for inexpensive stocks. Data from Thomson Reuters indicates that the average penny stock has a forward P/E ratio of just 9.8 times, compared to 12 times in the previous year. To check out more penny stocks, investors can also take a look at 12 Hot Penny Stocks On the Move, 13 Cash Rich Penny Stocks That Hedge Funds Are Buying, and 10 Penny Stocks that will Make You A Millionaire.

Our Methodology

We scanned Insider Monkey’s database of holdings of 920 elite hedge funds tracked as of the end of the third quarter of 2022 and picked the top 12 one dollar stocks popular among smart investors. These are the most popular stocks priced under $1 among hedge funds. The list is arranged in ascending order of the number of hedge fund holders in each firm.

Photo by Andres Perez on Unsplash

Best One Dollar Stocks to Buy According To Hedge Funds

12. Compugen Ltd. (NASDAQ:CGEN)

Number of Hedge Fund Holders: 11

Share Price as of January 26: $0.8765

Compugen Ltd. (NASDAQ:CGEN) was incorporated in 1993 and is headquartered in Holon, Israel. It is a clinical-stage therapeutic discovery and development company that researches, develops, and commercializes therapeutic and product candidates in Israel, the United States, and Europe. On December 6, Compugen Ltd. (NASDAQ:CGEN) announced that its drug COM701 in dual and triple combination with Bristol-Myers Squibb Company (NYSE:BMY) indicated preliminary durable anti-tumour activity and immune activation in patients with platinum resistant ovarian cancer in a trial.

On January 4, EF Hutton analyst Tony Butler initiated coverage of Compugen Ltd. (NASDAQ:CGEN) with a Buy rating and a $13 price target. Compugen Ltd. (NASDAQ:CGEN)’s lead program, COM701, has demonstrated effectiveness both on its own and when used in combination with other similar therapies, according to the analyst.

According to Insider Monkey’s data, 11 hedge funds were bullish on Compugen Ltd. (NASDAQ:CGEN) at the end of Q3 2022, and Jim Simons’ Renaissance Technologies is the largest position holder of the company, with 2.3 million shares worth $1.5 million.

In addition to Tesla, Inc. (NASDAQ:TSLA), Apple Inc. (NASDAQ:AAPL), and Amazon.com, Inc. (NASDAQ:AMZN), Compugen Ltd. (NASDAQ:CGEN) is one of the stocks on the radar of elite investors.

11. SelectQuote, Inc. (NYSE:SLQT)

Number of Hedge Fund Holders: 11

Share Price as of January 26: $0.7778

SelectQuote, Inc. (NYSE:SLQT) is a Kansas-based company that utilizes a technology-based platform that directly sells insurance plans and healthcare services to consumers in the United States. For fiscal year 2023, SelectQuote, Inc. (NYSE:SLQT) expects revenue to be in the range of $890 million to $960 million, versus the prior view of $850 million to $950 million. The consensus revenue estimate came in at $906.2 million. It is one of the best one dollar stocks to buy according to hedge funds.

On August 30, RBC Capital analyst Ben Hendrix maintained a Sector Perform rating on SelectQuote, Inc. (NYSE:SLQT) and lowered the price target on the shares to $2 from $3. The company did not meet expectations for their Q4 earnings and FY23 guidance, but the increasing proportion of high-quality earnings from SelectRx and indications of improving persistency in their Medicare Advantage plans should give investors more confidence in the company’s ability to reach EBITDA breakeven, according to the analyst. He also stated that SelectQuote, Inc. (NYSE:SLQT)’s recently modified credit agreement should provide sufficient liquidity for management to achieve this goal.

According to Insider Monkey’s data, 11 hedge funds were long SelectQuote, Inc. (NYSE:SLQT) at the end of the third quarter of 2022, compared to 9 funds in the prior quarter. Donald L. Hawks’ Brookside Equity Partners is the biggest position holder in the company, with 17.6 million shares worth $13 million.

Here is what Carillon Tower Advisers has to say about SelectQuote, Inc. (NYSE:SLQT) in its Q2 2021 investor letter:

“SelectQuote is a technology-enabled, direct-to-consumer distributor of complex senior health, life, auto, and home insurance policies. The stock underperformed during the quarter after the company reported results that were in line with expectations, but lowered the next quarter earnings outlook slightly due to investments in an adjacent business.”

10. Doma Holdings Inc. (NYSE:DOMA)

Number of Hedge Fund Holders: 12

Share Price as of January 26: $0.5652

Doma Holdings Inc. (NYSE:DOMA) was incorporated in 2016 and is headquartered in San Francisco, California. The company is involved in the process of creating, evaluating, and providing title, escrow, and settlement services to homeowners, lending institutions, title agents, and real estate professionals. On January 19, Doma Holdings Inc. (NYSE:DOMA) added digital payments solution provider Paymints.io to its AgentMarketplace vendor partnership program, which will lower the risk of wire fraud and allow homebuyers to digitally deposit money.

On December 14, investment advisory Citi initiated coverage of Doma Holdings Inc. (NYSE:DOMA) with a Neutral rating and a 45c price target. Analyst Michael Ward issued the ratings update.

According to Insider Monkey’s third quarter database, 12 hedge funds were bullish on Doma Holdings Inc. (NYSE:DOMA), compared to 15 funds in the prior quarter. It is one of the best one dollar stocks to invest in according to smart investors.

9. Alaunos Therapeutics, Inc. (NASDAQ:TCRT)

Number of Hedge Fund Holders: 12

Share Price as of January 26: $0.6599

Alaunos Therapeutics, Inc. (NASDAQ:TCRT) is a Texas-based clinical-stage oncology-focused cell therapy company that develops adoptive TCR engineered T-cell therapies. On November 28, the company proposed an underwritten stock offering and said it aims to use the net proceeds to finance the ongoing development of the product candidates in its pipeline, and for working capital, capital expenditures, and general corporate purposes. Alaunos Therapeutics, Inc. (NASDAQ:TCRT) is one of the best one dollar stocks to invest in. The company expects its operating cash flow for 2023 to be between approximately $35 million and $40 million. It will have sufficient cash resources to fund research and development programs and operations into Q4 2023.

On October 4, Wells Fargo analyst James Shin assumed coverage of Alaunos Therapeutics, Inc. (NASDAQ:TCRT) with an Overweight rating and a $3 price target. The analyst views the patient data from CRI-ENCIAACR in a single NSCLC patient showing response as a positive development for TCR-T cell therapy and Sleeping Beauty gene engineering. He also said that this early data provides proof-of-concept for TCRT’s Sleeping Beauty engineered TCR-T cells against driver mutations.

According to Insider Monkey’s data, Alaunos Therapeutics, Inc. (NASDAQ:TCRT) was part of 12 hedge fund portfolios at the end of September 2022, compared to 16 in the prior quarter. Marc Lisker, Glenn Fuhrman, and John Phelan’s MSDC Management is the largest stakeholder of the company, with 15.15 million shares worth $26 million.

8. ATI Physical Therapy, Inc. (NYSE:ATIP)

Number of Hedge Fund Holders: 13

Share Price as of January 26: $0.4800

ATI Physical Therapy, Inc. (NYSE:ATIP) was founded in 1996 and is based in Bolingbrook, Illinois. It operates as an outpatient physical therapy provider, specializing in outpatient rehabilitation and adjacent healthcare services in the United States. On November 16, Deutsche Bank analyst Pito Chickering maintained a Hold rating on ATI Physical Therapy, Inc. (NYSE:ATIP) and trimmed the firm’s price target on the shares from $2 to 65 cents. The analyst said that the company has incurred over $100 million in charges for goodwill and intangible asset impairment in each quarter of 2022. He also stated that he sees some slight signs of improvement in ATI Physical Therapy, Inc. (NYSE:ATIP)’s fundamentals, but he remained concerned about the company’s long-term prospects as it continues to face challenges with higher costs, lower pricing, and mediocre growth in volume.

According to Insider Monkey’s data, 13 hedge funds were bullish on ATI Physical Therapy, Inc. (NYSE:ATIP) at the end of September 2022, and Michael Novogratz’s Fortress Investment Group is the largest stakeholder of the company, with 16 million shares worth $16 million.

Here is what Bernzott Capital Advisors US Small Cap Value has to say about ATI Physical Therapy, Inc. (NYSE:ATIP) in its Q4 2021 investor letter:

“ATI Physical Therapy (ATIP): Disruptions in its professional workforce resulted in reduced patient visits per day and disappointing profitability. As the year progressed, the company reported progress in hiring and retention, which is a requisite for improved results. Longer-term, the company should benefit from market tailwinds including an aging population, more proactive utilization of physical therapy as a means of preventative care, and avoidance of mitigatable health care costs.”

7. LumiraDx Limited (NASDAQ:LMDX)

Number of Hedge Fund Holders: 13

Share Price as of January 26: $0.8900

LumiraDx Limited (NASDAQ:LMDX) is a London-based point of care diagnostics company. The company focuses on transforming community-based healthcare by offering critical diagnostic information to healthcare providers. On December 14, LumiraDx Limited (NASDAQ:LMDX) disclosed that it received $14.2 million in grants from the Bill & Melinda Gates Foundation for ongoing development of its point of care molecular tuberculosis testing system. Furthermore, the LumiraDx Platform’s portability would enable the TB test to be utilized in countries with limited laboratory access, particularly in low and middle-income nations. LumiraDx Limited (NASDAQ:LMDX) is one of the best penny stocks to invest in.

On December 19, Goldman Sachs analyst Matthew Sykes initiated coverage of LumiraDx Limited (NASDAQ:LMDX) with a Neutral rating and a $1.20 price target, implying 36% upside. The analyst believes that the company has a strong value proposition with the ability to move diagnostic testing closer to the point of care, but noted that executing on this in a highly competitive market will take time and resources.

According to Insider Monkey’s data, 13 hedge funds were long LumiraDx Limited (NASDAQ:LMDX) at the end of September 2022, compared to 9 funds in the prior quarter. Richard Mashaal’s Rima Senvest Management is the biggest stakeholder of the company, with 10.7 million shares worth $11 million.

6. Gran Tierra Energy Inc. (NYSE:GTE)

Number of Hedge Fund Holders: 15

Share Price as of January 26: $0.9352

Gran Tierra Energy Inc. (NYSE:GTE) was incorporated in 2003 and is headquartered in Calgary, Canada. The company engages in the exploration and production of oil and gas properties in Colombia and Ecuador. On January 10, Gran Tierra Energy Inc. (NYSE:GTE) announced that it sees Q4 2022 total company average production of nearly 32,600 BOPD, an increase of 10% from Q4 2021. The company’s total average production for the full year 2022 was 30,800 BOPD, which is within its prescribed guidance. Gran Tierra Energy Inc. (NYSE:GTE) also reduced its total debt of $210.1 million over the past two fiscal years.

On November 2, Canaccord analyst Roman Rossi raised the firm’s price target on Gran Tierra Energy Inc. (NYSE:GTE) to C$3 from C$2.80 and kept a Buy rating on the shares.

According to Insider Monkey’s third quarter database, 15 hedge funds were bullish on Gran Tierra Energy Inc. (NYSE:GTE), up from 11 funds in the prior quarter. Thomas E. Claugus’ GMT Capital is the largest stakeholder of the company, with more than 20 million shares worth $24.7 million.

Like Tesla, Inc. (NASDAQ:TSLA), Apple Inc. (NASDAQ:AAPL), and Amazon.com, Inc. (NASDAQ:AMZN), Gran Tierra Energy Inc. (NYSE:GTE) is one of the stocks that hedge funds are piling into.

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