13 Best Canadian Penny Stocks to Invest in Now

2. Algoma Steel Group Inc. (NASDAQ:ASTL)

Closing Stock Price as of April 17^th: $4.80

Number of Hedge Fund Holders: 36

Algoma Steel Group Inc. (NASDAQ:ASTL) is a vertically integrated steel producer that manufactures hot and cold-rolled steel sheet and plate products for the automotive, construction, energy, defense, and manufacturing sectors. The company’s strength lies in its strategic location near the Great Lakes, which benefits from multimodal transportation access, facilitating efficient distribution across North America.

Algoma Steel Group Inc. (NASDAQ:ASTL) reported challenging fourth quarter results with an adjusted EBITDA loss of $60.3 million and cash used in operating activities of $76.9 million. Despite higher shipments of 549,000 tons (up 6.3% YoY), lower realized prices of $976 per ton compared to $1,079 per ton in the prior year period impacted financial performance. The company maintained a strong balance sheet with $267 million in cash and total liquidity of $630 million at quarter end.

Algoma Steel Group Inc. (NASDAQ:ASTL) is in the final stages of its transformative electric arc furnace (EAF) project, with first steel production expected in April 2025. The cumulative investment for the EAF project reached $740 million as of December 31, 2024, and is expected to complete within 5% of the upper end of the previously announced budget range. While facing challenges from US tariffs on Canadian steel imports, the company expects its transition to EAF steelmaking will strengthen its cost structure and enhance its ability to navigate market uncertainties over the long term. When both furnaces are operational, the company expects improved operational efficiency and overall cost structure, with shipping capacity reaching approximately 3 million tons per year. At least 36 hedge funds own the stock as per Insider Monkey’s Q4 2024 database, which further reinforces the strong outlook and makes us include ASTL in second place on our list of the best penny stocks to consider.