We recently published a list of 10 Best Nasdaq Stocks Under $5 to Buy. In this article, we are going to take a look at where Clean Energy Fuels Corp. (NASDAQ:CLNE) stands against other best Nasdaq stocks under $5 to buy.
The Nasdaq is one of the top three most-followed stock market indices in the United States, comprising over 2,500 stocks. Its composition is heavily skewed towards the Technology sector, and as of February 10, 2025, the technology sector constituted around 60% of the index’s weight. Consumer Discretionary follows as the second-largest sector, accounting for approximately 20% of the weight. Given this substantial weighting, the Nasdaq is commonly regarded as a leading indicator of the performance of the IT industry.
While the Nasdaq includes tech giants with the largest market capitalizations, it also presents opportunities to invest in stocks often referred to as “penny stocks.” These stocks, priced under $5, offer significant growth potential for investors seeking high returns at a relatively low capital outlay. Although these stocks come with high return and diversification opportunities, they also carry higher risks due to their smaller market capitalization, relatively higher debt, and greater volatility in share prices.
To provide a perspective on the small-cap investing landscape, we refer to recent insights from Francis Gannon, Co-Chief Investment Officer at Royce Investment Partners. In November 2024, during an interview with Yahoo Finance, Gannon discussed his thesis on small-caps. He noted that small-caps had been out of favour for an extended period, with the Russell 2000 reaching its peak three years ago and experiencing negative returns since then. Gannon believes the new Trump administration, reshoring efforts, leading innovation, and a favourable earnings season will significantly boost small-cap companies, describing this shift as nothing short of a “revolution.”
As a result, exciting return opportunities are anticipated in the small-cap space in the coming years. When reviewing stocks priced under $5, investors should carefully select emerging companies with innovative business models or disruptive technologies, and those that have the potential to deliver exponential growth as they capture market share, develop new products, or enter new markets.
Our Methodology
To identify the 10 best Nasdaq stocks under $5 to buy, we screened Nasdaq-listed companies with a market price below $5. We selected the 10 companies that were the most widely held by hedge funds and ranked them in ascending order of hedge fund holders, as of Q3 2024.
Note: All pricing data is as of market close on February 10.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A row of fuel pumps at a fueling station, displaying the magnitude of the energy revolution.
Clean Energy Fuels Corp. (NASDAQ:CLNE)
Current Market Price: $3.40
Number of hedge funds: 22
Clean Energy Fuels Corp. (NASDAQ:CLNE) is a provider of natural gas as an alternative fuel for vehicle fleets in the United States and Canada. The company operates a network of fueling stations and offers a range of services to support the transition to cleaner energy solutions. Clean Energy Fuels focuses on providing renewable natural gas (RNG) and compressed natural gas (CNG) to reduce greenhouse gas emissions and promote sustainable transportation.
In Q3 2024, Clean Energy Fuels Corp. (NASDAQ:CLNE) reported a healthy 10% year-over-year (YoY) revenue growth and also narrowed its net loss to $18.2 million from the $25.8 million loss reported in Q3 2023. The company sold 59.6 million gallons of RNG which also saw a healthy 5.1% increase. President and Chief Executive Officer, Andrew Littlefair, called it a very solid quarter as the strength from the first half of the year continued in Q3 as well. He remains upbeat on the company’s RNG business and the partnership with Maas Energy. At the Q3 conference call, he stated:
“The beauty of RNG is that it can be used as a fuel itself or as the cleanest feedstock for other alternatives. Turning to our RNG production business. We continue to make good progress on our projects at dairy farms across the U.S. We currently have 6 operating projects, 2 projects under construction that are expected to come online in the second half of 2025 and other RNG projects in advanced development through our new partnership with Maas Energy.”
Overall, CLNE ranks 5th on our list of best Nasdaq stocks under $5 to buy. While we acknowledge the potential of CLNE to grow, our conviction lies in the belief that 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 CLNE 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. This article is originally published at Insider Monkey.
