In this article, we will look at the 10 Best Performing Affordable Stocks Under $40.
On January 14, Liz Ann Sonders from Charles Schwab appeared on a CNBC Television interview to discuss the market volatility, broadening out themes, and more. She calls the current volatility a market pause period after 2 years of robust gains. She highlighted that one of the key trends for 2026 is the broadening of the tech sectors. Sonders noted that broadening out themes has legs, and the sectors under focus are international equities and small caps. However, she highlighted that within small caps, she is looking at quality small-cap stocks that have been profitable. Sonders also noted that the cyclical segments of the market, including materials and industrials, also look good for investment in 2026.
Sonders added that these sectors are expected to perform well, but not in a linear fashion. She elaborated that, as most experts expect volatility, this suggests that 2026 is a stock picker’s market. Unlike previous years, when investors could invest blindly in cohorts like “Mag 7” or sectors like tech and healthcare, the current market demands a more active approach of selecting quality stocks from each sector.
With that, let’s take a look at the 10 Best Performing Affordable Stocks Under $40.
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Our Methodology
To curate the list of 10 Best Performing Affordable Stocks Under $40, we used the Finviz stock screener, Seeking Alpha, and Insider Monkey’s Q3 2025 database. Using the screener, we aggregated a list of stocks trading below $40, with a forward P/E ratio of under 15, and that have gained more than 35% over the past 6 months. Next, we cross-checked the price, valuation, and performance from Seeking Alpha and ranked the stocks in ascending order of the number of Hedge Funds. Please note that the data was recorded on January 12, 2026.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10 Best Performing Affordable Stocks Under $40
10. Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA)
Price: $23.58
Forward P/E Ratio: 11.74
6-month Performance: 47.65%
Number of Hedge Fund Holders: 12
Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA) is one of the Best Performing Affordable Stocks Under $40. On January 9, Antonia Reale from Bank of America Securities reiterated a Buy rating on the stock and raised the price target from EUR21 to EUR24.3. Earlier on January 5, Citi also reiterated a Buy rating on Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA) and raised the price target from EUR21 to EUR21.5.
Analysts from BofA noted the bank has “enviable quality franchise with solid market shares” in Mexico, Türkiye, and Spain, supported by a $133.7 billion market cap. He added that the bank generates around 60% profit from Mexico, which is expected to rise further by the USMCA trade agreements, boosting near-shoring despite ongoing volatility. Moreover, the firm also expects the bank to see significant growth in Türkiye. The profits from Türkiye are expected to triple by 2028, despite the higher provisions.
Lastly, BofA noted that Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA) trades at a discount to peers and its fair value, achieving around 22% return on tangible equity (ROTE) alongside anticipated share buybacks.
Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA) is a Spain-based multinational bank offering diversified financial services, including retail and wholesale banking, asset management, private banking, and insurance.
9. Emergent BioSolutions Inc. (NYSE:EBS)
Price: $13.36
Forward P/E Ratio: 6.52
6-month Performance: 82.26%
Number of Hedge Fund Holders: 19
Emergent BioSolutions Inc. (NYSE:EBS) is one of the Best Performing Affordable Stocks Under $40. On January 8, Emergent BioSolutions Inc. (NYSE:EBS) announced receiving an order worth up to $21.5 million from the US Department of War.
Management noted that the order entails the supply of BioThrax, which is the company’s primary product for anthrax protection, primarily for military personnel at high risk of exposure. Deliveries are expected to occur throughout 2026 with a one-year base period and optional extensions into 2027 and 2028. Management also highlighted that BioThrax remains the only FDA-approved anthrax vaccine, and the latest order aligns with the company’s ongoing role in providing vaccines for US defense needs against biological threats.
That said, on the same day, Emergent BioSolutions Inc. (NYSE:EBS) announced its collaboration with PANTHER to fund the ongoing “MpOx Study in Africa, which is an Africa CDC-led trial testing potential treatments for Mpox. Safety data from the first 50 randomized patients were collected in December, and the trial was cleared to proceed without any issues. Management noted that this partnership positions the company in a high-demand area of Mpox preparedness amid ongoing outbreaks.
Emergent BioSolutions Inc. (NYSE:EBS) is a prominent life sciences company focused on providing solutions to public health threats, including opioid overdoses, infectious diseases, and biological threats.
8. Fortuna Mining Corp. (NYSE:FSM)
Price: $10.48
Forward P/E Ratio: 13.78
6-month Performance: 59.27%
Number of Hedge Fund Holders: 22
Fortuna Mining Corp. (NYSE:FSM) is one of the Best Performing Affordable Stocks Under $40. Fortuna Mining Corp. (NYSE:FSM) has gained more than 59.27% over the past 6 months. Recently, on December 8, the company announced positive exploration drilling results from its Diamba Sud Gold Project in Senegal.
Management noted that the Preliminary Economic Assessment shows strong economic potential with an estimated after-tax NPV5% of US$563 million and 72% IRR at a gold price of US$2,750/oz. The company further noted that infills suggest higher grade results and extension drilling. Management highlighted that the hole DSDD555 hit 6.8 g/t gold over 35.5m true width, which is exceptionally wide and high-grade. Moreover, hole DSDD574 returned 1.7 g/t over 29.6m and 2.0 g/t over 20.0m true widths. Management noted that these broad, consistent intervals suggest mineralization expansion, potentially growing the resource.
Fortuna Mining Corp. (NYSE:FSM) aims for a feasibility study and construction decision by Q2 2026. Moreover, the results are expected to be updated in Q1 2026 resource estimates, thereby boosting project value ahead of feasibility.
Fortuna Mining Corp. (NYSE:FSM) is a Canadian mining company that focuses on extracting precious metals, primarily gold and silver. The company operates several mines located in Latin America and West Africa, specifically in countries like Argentina, Burkina Faso, Côte d’Ivoire, Mexico, and Peru.
7. Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL)
Price: $39.96
Forward P/E Ratio: 6.00
6-month Performance: 106.51%
Number of Hedge Fund Holders: 23
Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) is one of the Best Performing Affordable Stocks Under $40. On January 12, Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) released its preliminary results for the fourth quarter of 2025 and also provided its 2026 outlook.
Although the company is set to release its official results on March 3, the preliminary data suggests that the fourth quarter revenue will be around $69.8 million, compared to $57.6 million for the same period of 2024. Moreover, management expects fourth quarter 2025 gross product sales of $84.5 million, driven by TAVALISSE net product sales of $45.6 million, GAVRETO net product sales of $10.2 million, and REZLIDHIA net product sales of $9.6 million.
For the full year, Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) expects to deliver around $294.3 million in revenue, up from $179.3 million in 2024. Looking ahead, management projects 2026 total revenue in the range of $275 million to $290 million.
That said, Wall Street is bullish on Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) after the release. On January 13, Joseph Pantginis from H.C. Wainwright reiterated a Buy rating on the stock with a $57 price target.
Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) is a clinical-stage biotechnology company that discovers and develops targeted, novel drugs in oncology, immunology, and immune oncology. Its product portfolio includes Tavalisse, Fostamatinib, and R835.
6. Barclays PLC (NYSE:BCS)
Price: $26.07
Forward P/E Ratio: 10.88
6-month Performance: 39.94%
Number of Hedge Fund Holders: 28
Barclays PLC (NYSE:BCS) is one of the Best Performing Affordable Stocks Under $40. On January 13, Kepler Cheuvreux maintained a Buy rating on Barclays PLC (NYSE:BCS) and raised the price target from GBP4.60 to GBP5.40. Earlier, on January 6, Jonathan Pierce from Jefferies also reiterated a Buy rating on the stock and raised the price target from 470p to 560p.
Analysts at Kepler Cheuvreux noted that their bullish sentiment is based on tailwinds, including capital redeployment and structural hedge benefits, which are improving returns for the bank. Moreover, the firm also sees significant room for future growth. It noted that the US consumer bank of Barclays is showing signs of improvement, along with the UK and investment operations, providing significant cost reduction opportunities. Kepler Cheuvreux expects return on tangible equity to exceed 14% by 2028.
That said, Barclays PLC (NYSE:BCS) on January 7 announced a strategic investment in Ubyx Inc., which is a US -based tech firm building a clearing system for digital money. The digital system includes tokenized deposits and regulated stablecoins. Management noted that this investment aligns with the rising adoption of tokenized money on public blockchains beyond crypto speculation.
Headquartered in London, Barclays PLC (NYSE:BCS) is a bank holding company that provides credit cards, retail banking, wealth management, and corporate and investment banking services.
5. International Money Express, Inc. (NASDAQ:IMXI)
Price: $15.47
Forward P/E Ratio: 9.16
6-month Performance: 48.61%
Number of Hedge Fund Holders: 28
International Money Express, Inc. (NASDAQ:IMXI) is one of the Best Performing Affordable Stocks Under $40. International Money Express, Inc. (NASDAQ:IMXI) has gained roughly 49% over the past 6 months. Recently, on January 5, Monness analyst reiterated a Hold rating on the stock with a price target of $16.
Earlier on December 2, the company announced a partnership between its Intermex and Banco Industrial to launch a digital remittance service via the Zigi App. Intermex is a major remittance provider focused on Latin America and the Caribbean, while Banco Industrial is one of Guatemala’s leading banks. As a result of this partnership. Intermex’s Amigo Paisano app will be integrated with Zigi, enabling Guatemalans to receive money transfers directly into their accounts using a phone number. Management noted that this shift in remittances from cash pickups to instant and secure digital deposits.
Moreover, International Money Express, Inc. (NASDAQ:IMXI) also noted that they plan to streamline the process of remittance by fully digitizing the flow from sender to receiver. Management believes that this integration will potentially boost adoption and also increase transaction volumes for the company.
International Money Express, Inc. (NASDAQ:IMXI) provides omnichannel money remittance services, using proprietary technology to let consumers send funds from the US, Canada, and Europe to over 60 countries.
4. Sally Beauty Holdings, Inc. (NYSE:SBH)
Price: $15.37
Forward P/E Ratio: 7.46
6-month Performance: 53.70%
Number of Hedge Fund Holders: 29
Sally Beauty Holdings, Inc. (NYSE:SBH) is one of the Best Performing Affordable Stocks Under $40. Sally Beauty Holdings, Inc. (NYSE:SBH) has gained more than 53% during the past 6-months and Wall Street maintains a positive stance on the stock ahead of its fiscal Q1 2026 earnings expected to be released on January 29, 2026.
On December 10, Oliver Chen from TD Cowen maintained a Buy rating on the stock with a $17 price target. Earlier, on December 5, Canaccord Genuity analyst Susan Anderson also maintained a Buy rating on the stock without disclosing any price targets. Analysts from Canaccord Genuity noted that they like Sally Beauty Holdings, Inc.’s (NYSE:SBH) strategic initiatives and market position. The firm noted that the company’s Sally Ignited initiative aims at modernizing and refreshing the brand through remodeled stores and a curated product selection. The firm noted that the initiative has shown early signs of success and is expected to expand significantly in the coming years.
Moreover, the firm also likes the company’s investment in its digital capabilities. The firm elaborated that the Licensed Colorist on Demand tool is one of the factors driving customer engagement for the company.
Looking ahead, Wall Street expects Sally Beauty Holdings, Inc. (NYSE:SBH) to deliver $939.63 million in revenue along with a GAAP EPS of $0.46. Management during its latest earnings release noted that the fiscal Q1 2026 net sales are expected in the range of $935 million to $945 million, with adjusted EPS in the range of $0.43 to $0.47.
Sally Beauty Holdings, Inc. (NYSE:SBH) is an international specialty retailer specializing in professional beauty supplies. Its operations span two segments: Beauty Systems Group (BSG) and Sally Beauty Supply.
3. Herbalife Ltd. (NYSE:HLF)
Price: $14.67
Forward P/E Ratio: 6.84
6-month Performance: 46.55%
Number of Hedge Fund Holders: 33
Herbalife Ltd. (NYSE:HLF) is one of the Best Performing Affordable Stocks Under $40. On January 8, John Baumgartner from Mizuho Securities reiterated a Hold rating on the stock but raised the price target from $11 to $13. Earlier on January 6, Anthony Vendetti from Maxim Group initiated a Buy rating on Herbalife Ltd. (NYSE:HLF) with a $20 price target.
Analysts at Mizuho noted that they adjusted price targets for the food producers. The firm believes that Herbalife Ltd. (NYSE:HLF) is expected to grow and outperform in 2026. However, Mizuho cautioned about compressed valuations. The firm believes that weak fundamentals and elevated macro uncertainty is one of the reasons why the valuations remain compressed.
On the other hand, Maxim Group believes a turnaround is underway, which will further solidify the company’s position in the health and wellness space. The firm added that the regulatory concerns from the United States have been resolved and the company has established a closer connection with the distributors, thereby enhancing the company’s supply chain model.
Herbalife Ltd. (NYSE:HLF) is a leading nutrition company that offers health and wellness products in approximately 95 markets worldwide. Its offerings include weight management, targeted nutrition, energy, sports, and fitness products.
2. Garrett Motion Inc. (NASDAQ:GTX)
Price: $18.17
Forward P/E Ratio: 11.74
6-month Performance: 60.65%
Number of Hedge Fund Holders: 37
Garrett Motion Inc. (NASDAQ:GTX) is one of the Best Performing Affordable Stocks Under $40. Garrett Motion Inc. (NASDAQ:GTX) is trading close to its 52-week high of $18.74. Wall Street maintains a positive opinion on the stock, with analysts’ 12-month price target reflecting 12.5% upside from the current levels.
Recently, on December 17, JPMorgan initiated the stock with an Overweight rating and a $23 price target. Earlier on December 12, BWS Financial also maintained a Buy rating on the stock and raised the price target from $18 to $22.
JPMorgan noted that the bullish sentiment is based on the fewer headwinds for Garrett Motion Inc.’s (NASDAQ:GTX) internal combustion engines and expected tailwinds for zero-emission vehicles. The firm noted that they expect battery electric vehicles to grow more slowly than previously anticipated, which reduces the challenges for GTX’s ICE business.
Similarly, BWS Financial also believes that ICE’s will remain relevant beyond 2035 due to their long lifespan as compared to battery electric vehicles. The firm highlighted that, as a result, the company’s near-term development and partnerships for ICE are likely to remain unchanged. Moreover, the company is also expanding into zero-emission vehicles, which also reaffirms the company’s long-term investment case.
Garrett Motion Inc. (NASDAQ:GTX) is a Switzerland-based automotive technology company. It specializes in turbocharging and electric boosting technology for vehicles.
1. Macy’s, Inc. (NYSE:M)
Price: $23.72
Forward P/E Ratio: 10.88
6-month Performance: 89.76%
Number of Hedge Fund Holders: 42
Macy’s, Inc. (NYSE:M) is one of the Best Performing Affordable Stocks Under $40. On December 30, Mike Hickey from Benchmark Co. reiterated a Buy rating on the stock without disclosing any price targets. Earlier, on December 5, Evercore ISI maintained a Hold rating on the stock and raised the price target on the stock from $14 to $21.
The positive sentiment follows the company’s fiscal Q3 2026 earnings announced on December 3. The quarterly revenue fell slightly by 0.61% year-over-year to $4.71 billion but topped estimates by $154.53 million. The EPS of $0.09 also topped estimates by $0.22. Management noted that the net sales exceeded their guidance range. Moreover, the third quarter sales were also reported to be the strongest in 13 quarters, driven by the company’s bold new chapter strategy.
Evercore ISI noted the quarter to be robust. However, the firm expressed its disappointment regarding the company’s fourth quarter same-store sales target, which Macy’s, Inc. (NYSE:M) expects to deliver -2.5% to flat growth. Evercore ISI believes that the company needs to deliver at least 2% to 3% same-store sales growth as it rolls out its Reimagine 125 initiatives to more stores in 2026 and beyond.
Macy’s Inc. (NYSE:M) is an omnichannel retail store that manages three brands: Macy’s, Bloomingdale’s, and Bluemercury. These brands sell a variety of merchandise, including accessories, apparel, consumer goods, home furnishings, and more.
While we acknowledge the potential of M to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than M and that has 100x upside potential, check out our report about this cheapest AI stock.
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