We recently published a list of 12 Best Robinhood Stocks to Buy Under $20. In this article, we are going to take a look at where KeyCorp (NYSE:KEY) stands against other best Robinhood stocks to buy under $20.
Stocks priced under $20 have become an attractive option for investors looking to tap into growth without paying the high premiums of blue-chip stocks. These companies often operate in innovative sectors—like quantum computing, autonomous delivery, and clean energy—where technological advancements could lead to significant returns. However, these stocks also come with risks, such as volatility and speculative trading, making it important to separate hype from long-term potential.
Retail trading platforms like Robinhood have made these stocks more accessible, allowing retail investors to drive market movements. In 2023, retail trading accounted for 23% of U.S. equity volumes, according to JPMorgan. This shift has altered the landscape of stock investing, with retail investors now playing a significant role in driving the prices of low-priced stocks. Robinhood, with its commission-free structure and easy-to-use app, has attracted millions of new investors eager to participate in the stock market, often gravitating toward the affordability of stocks under $20.
Low-priced stocks are appealing for a few key reasons. The affordability of these stocks means that investors can diversify their portfolios more easily, mitigating risk by spreading investments across various companies or sectors. For new or retail investors, low-priced stocks can provide an accessible entry point into the market. With a smaller initial investment, it’s easier to dip your toes into stock investing without committing large amounts of capital.
Low-priced stocks often represent companies in the early stages of growth or in industries that are still developing. These stocks may have greater potential for significant price appreciation, particularly if the company experiences a breakthrough. Investors who get in early can sometimes ride the wave of exponential growth. For example, in 2010, Tesla’s IPO price was $17 per share, and for several years, it traded below $20. By 2021, however, the company’s stock price surged to over $1,000 per share, reflecting the company’s transition from an early-stage electric vehicle startup to a global leader in the industry.
However, these stocks also come with risks, such as volatility and speculative trading, making it important to separate hype from long-term potential. According to Saxo Bank, small-cap stocks—often found in the under-$20 price range—tend to be more sensitive to market fluctuations and economic shifts, which can lead to higher volatility and greater price swings.
Our Methodology
For this list, we analyzed stocks that are frequently traded and popular among Robinhood users, focusing on those that are trading under $20. We started by gathering data from multiple trusted financial sources, including popular stock websites and financial news platforms, to identify Robinhood stocks under $20 that are consistently favored by retail investors. Next, we cross-referenced these stocks with Insider Monkey’s Q3 2024 hedge fund database to identify which companies had significant institutional backing. The stocks were then ranked according to the number of hedge fund investors holding positions in them.
Why are we interested in 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).
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KeyCorp (NYSE:KEY)
Number of Hedge Fund Holders: 41
KeyCorp (NYSE:KEY) is a leading regional bank offering a range of financial services, including retail banking, commercial banking, and investment management. Through its principal subsidiary, KeyBank, the company serves individuals, small businesses, and corporations across the U.S.
KeyCorp (NYSE:KEY) has recently undertaken several strategic initiatives to enhance its operations and community engagement. In December 2024, the company announced a significant partnership with The Bank of Nova Scotia, with Scotiabank investing approximately $2.0 billion to acquire a 14.9% stake in KeyCorp (NYSE:KEY). This collaboration aims to leverage both institutions’ strengths in North America, focusing on payments, wealth management, and investment banking.
In January 2025, KeyCorp (NYSE:KEY) appointed Mohit Ramani as its new Chief Risk Officer. Ramani brings extensive experience from his previous roles at Truist Financial, Goldman Sachs, and Bank of America. He will lead the company’s risk management team, reporting directly to Chairman and CEO Chris Gorman.
KeyCorp (NYSE:KEY) reported a challenging fourth quarter of 2024, posting a net loss of $279 million. However, adjusted net income was stronger at $378 million, reflecting solid performance in its core businesses. Revenues for the quarter reached $865 million, a 16% increase year-over-year when adjusted for selected items, and net interest income grew by 10% compared to the previous quarter.
Currently, 41 hedge funds in the Insider Monkey Q3 2024 database held positions in the company.
Overall, KEY ranks 2nd on our list of best Robinhood stocks to buy under $20. While we acknowledge the potential for KEY as an investment, our conviction lies in the belief that some 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 KEY 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.
