12 Cash-Rich Penny Stocks To Buy According To Hedge Funds

Page 10 of 10

1. Lumen Technologies, Inc. (NYSE:LUMN)

TTM Operating Cash Flow as of December 31, 2024: $4,333,000,000

Number of Hedge Fund Holders: 44

Share Price as of March 4: $4.795

Lumen Technologies, Inc. (NYSE:LUMN) is a networking company that provides internet, cloud, security, and communication services to businesses and consumers worldwide. On December 17, 2024, Prometheus Hyperscale announced that it is teaming up with Lumen to power its energy-efficient data centers and keep up with the rising demand for AI. Lumen’s network will provide fast, reliable connectivity while supporting Prometheus’ commitment to sustainability across its US facilities.

Lumen Technologies, Inc. (NYSE:LUMN) bounced back in Q4 2024 with an $85 million net income, a major turnaround from the $1.995 billion loss in Q4 2023, which was largely due to a $1.9 billion goodwill impairment charge. Earnings per share also improved to $0.09 from a loss of $2.03 in the prior-year quarter. Cash flow was also robust, with $688 million generated from operations in Q4, and free cash flow for the year came in at $1.386 billion, a huge improvement compared to the negative $878 million cash flow in 2023. It is one of the best cash-rich stocks to look out for.

Among the hedge funds tracked by Insider Monkey in Q4 2024, 44 funds reported owning stakes in Lumen Technologies, Inc. (NYSE:LUMN), up from 26 funds in the last quarter.

Overall, Lumen Technologies, Inc. (NYSE:LUMN) ranks first on our list of the best cash-rich penny stocks to buy. While we acknowledge the potential of LUMN to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LUMN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.

Page 10 of 10