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10 Best Debt Free Small Cap Stocks to Buy Now

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In this piece, we discuss the 10 Best Debt Free Small Cap Stocks to Buy Now.

High leverage can be both an advantage and a liability. While on one hand, borrowing may reduce taxable income and increase returns in good times, on the other hand, it can also create fixed obligations that linger when profits shrink.

For small-cap companies, which are often characterized by uneven cash flows, high leverage can quickly turn into a liability. On the other hand, debt-free or low-debt companies enjoy the flexibility to reinvest in operations, carry out acquisitions, or return capital to shareholders. These debt-free or low-debt companies pose a competitive edge that grows more valuable when the economy softens. This is increasingly relevant today, as S&P Global Market Intelligence notes that U.S. corporate bankruptcy filings are estimated to hit their highest first-half total since 2010, with 371 filings year-to-date. Balance sheets across sectors are under pressure due to elevated interest rates, tighter credit conditions, and pressure from persistent inflation and tariff policies.

Still, broader equity markets remain on their upward trajectory. On Monday, September 23, 2025, the S&P 500, Nasdaq, and Dow all closed the day at record highs, thanks to a 3.9% surge in Nvidia following its $100 billion investment in OpenAI to scale data centers. Additionally, Oracle and Apple also closed the day higher, while the Russell 2000 small-cap index hit its first record close since 2021, driven by the Federal Reserve’s recent rate cut.

With this backdrop in mind, let’s move to our list of the 10 Best Debt Free Small Cap Stocks to Buy Now.

Our Methodology

To curate our list of the 10 Best Debt Free Small Cap Stocks to Buy Now, we used the Finviz screener to curate a list of stocks with a market capitalization of under $2 billion. For these stocks, we compared their enterprise value (EV) to their market capitalization (EV to market cap ratio) to gauge which ones are debt-free. These companies may not be entirely debt-free, but they maintain a solid financial standing with low net debt and substantial cash reserves. Finally, we ranked these stocks in ascending order based on the number of hedge funds holding stakes in respective stocks, as of Q2 2025.

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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

10. Anavex Life Sciences Corp. (NASDAQ:AVXL)

EV to Market Cap: 0.86

Number of Hedge Fund Holders: 9

Anavex Life Sciences Corp. (NASDAQ:AVXL) is one of the 10 Best Debt Free Small Cap Stocks to Buy Now.

On September 11, 2025, H.C. Wainwright reiterated its ‘Buy’ rating on Anavex Life Sciences Corp. (NASDAQ:AVXL) with a $42 price target. This bullish stance follows new Phase 2b/3 Alzheimer’s data.

Anavex Life Sciences Corp. (NASDAQ:AVXL)’s shares are currently trading well below this target, indicating significant upside potential. Meanwhile, the company announced on September 9, 2025, that its oral therapy blarcamesine noted reduced cognitive decline across key measures in early Alzheimer’s patients. This bolsters confidence in the company’s precision medicine approach.

Anavex Life Sciences Corp. (NASDAQ:AVXL), a biopharmaceutical company, develops novel therapeutics for neurodegenerative, neurodevelopmental, and neuropsychiatric disorders. It is one of the Best Debt Free Stocks.

9. Daqo New Energy Corp. (NYSE:DQ

EV to Market Cap: 0.08

Number of Hedge Fund Holders: 10

With significant upside potential, Daqo New Energy Corp. (NYSE:DQ) secures a spot on our list of the 10 Best Debt Free Small Cap Stocks to Buy Now.

On September 11, 2025, under a retrial verdict, Daqo New Energy Corp. (NYSE:DQ)’s subsidiary Xinjiang Daqo was ordered to pay roughly $453,000 in compensation and attorneys’ fees to two companies that had provided silicon core processing services.

Furthermore, the court also affirmed the termination of the cooperation agreement between the parties. Meanwhile, the plaintiff’s claims for consequential damages were rejected by the court. Daqo New Energy Corp. (NYSE:DQ) stated that the litigation’s impact on its subsidiary will be contingent upon the final verdict.

Daqo New Energy Corp. (NYSE:DQ) manufactures and sells high-purity polysilicon to photovoltaic product manufacturers in China. It is one of the Best Debt Free Stocks.

8. MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT)

EV to Market Cap: 0.78

Number of Hedge Fund Holders: 11

MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) is one of the 10 Best Debt Free Small Cap Stocks to Buy Now.

On September 17, 2025, MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) announced that it had added five new dealerships across Mexico and Germany. These additions are part of the company’s international expansion strategy. Two of the five dealerships are in Mexico City and Valle de Bravo, while three are located in Germany.

These new dealerships were selected based on track record, product expertise, and commitment to customer care standards, MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) stated. This expansion is expected to strengthen the company’s market presence in key international regions.

MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) designs, manufactures, and markets recreational powerboats. It is one of the Best Debt Free Stocks.

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AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
  • It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
  • It plays a pivotal role in U.S. LNG exportation—a sector about to explode under President Trump’s renewed “America First” energy doctrine.

Trump has made it clear: Europe and U.S. allies must buy American LNG.

And our company sits in the toll booth—collecting fees on every drop exported.

But that’s not all…

As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

And infrastructure needs a builder with experience, scale, and execution.

This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

They’re sharing it quietly, away from the cameras, to rooms full of ultra-wealthy clients.

Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
  • The onshoring boom driven by Trump-era tariffs
  • A surge in U.S. LNG exports
  • And a unique footprint in nuclear energy—the future of clean, reliable power

You simply won’t find another AI and energy stock this cheap… with this much upside.

This isn’t a hype stock. It’s not riding on hope.

It’s delivering real cash flows, owns critical infrastructure, and holds stakes in other major growth stories.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

This isn’t just about making money – it’s about being part of the future.

So, buckle up and get ready for the ride of your investment life!

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…