In this article, we will look at the 10 Cheap Small Cap Stocks to Buy Now.
On June 26, Ed Yardeni, Yarden Research president, appeared on CNBC’s ‘Squawk on the Street’ to talk about the latest market trends, his take on hyperscalers, and more.
He talked about how he believes in FEMO, which stands for Fabulous Earnings Momentum, and stated that he has been bullish enough on earnings as we have had “fabulous earnings momentum”. He believes that from an earnings standpoint, the market looks “very solid” and that we are experiencing a “June swoon” in some areas, with the market experiencing what he calls the “AI fatigue” in others.
READ ALSO: 15 Safe Stocks for Beginners to Buy in 2026 AND 15 Best Trending AI Stocks to Watch in 2026.
He said that they have been beating up trying to figure out how this all plays out, and we may be seeing another deep-sea kind of moment here, with concerns that the Chinese are once again coming out with cheaper models. Yardeni also cited the other issues about how profitable this business is going to be. However, he also stated that clearly, the demand for hardware is “very, very strong”, and the companies are going to continue building the data centers and having a “very, very positive” impact on the economy.
With these broader market trends in view, let’s look at the cheap small cap stocks to buy now.
Our Methodology
We used the Finviz stock screener to identify the best small-cap stocks with a forward P/E below 15. We then selected the top 10 stocks most popular among hedge funds as of Q1 2026, using the hedge fund sentiment data from Insider Monkey’s database. The stocks are arranged in ascending order of hedge fund sentiment.
Note: All data was recorded on June 28.
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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10 Cheap Small Cap Stocks to Buy Now
10. Willis Lease Finance Corporation (NASDAQ:WLFC)
Number of Hedge Fund Holders: 11
Willis Lease Finance Corporation (NASDAQ:WLFC) is one of the best cheap small cap stocks to buy now. Willis Lease Finance Corporation (NASDAQ:WLFC) announced on June 23 that its shareholders approved a three-for-one forward stock split of the company’s common stock, as well as a proportionate increase in the number of authorized shares of common stock to accommodate the stock split. Management stated that the company’s Board of Directors also approved the split, which will be effected through an amendment to Willis Lease Finance Corporation’s certificate of incorporation.
The company further reported that all shareholders of record as of the close of trading on July 6, 2026, will receive two additional shares for every one share held on the record date upon effectiveness of the Amendment. It added that, subject to final approval by Nasdaq, the company expects trading to begin on a split-adjusted basis at market open on July 20, 2026. Charles F. Willis, Executive Chairman of Willis Lease Finance Corporation, also stated:
“Including the stock split, all five proposals on our 2026 proxy were passed by shareholders. Over the past several years, we have built meaningful momentum across the business, further positioning the Company to capitalize on growth opportunities and create value for shareholders.”
Willis Lease Finance Corporation provides aviation services and operating leases of aircraft engines, commercial aircraft, and other aircraft-related equipment to air carriers, manufacturers, and overhaul/repair facilities. The company’s operations are divided into Leasing and Related Operations, and Spare Parts Sales.
9. S&T Bancorp, Inc. (NASDAQ:STBA)
Number of Hedge Fund Holders: 12
S&T Bancorp, Inc. (NASDAQ:STBA) is one of the best cheap small cap stocks to buy now. S&T Bancorp, Inc. received a rating update from Piper Sandler on June 26. The firm lifted the price target on the stock to $51 from $45 and maintained a Neutral rating on the shares, stating that it adjusted price targets in the Northeast bank group as part of a fiscal Q2 earnings preview.
For additional reference, in its financial results for fiscal Q1 2026, S&T Bancorp, Inc. reported net income of $35.1 million for the quarter, compared to $34.0 million for fiscal Q4 2025 and $33.4 million for fiscal Q1 2025. Diluted earnings per share came up to $0.94 for fiscal Q1 2026, reflecting an increase of $0.05, or 5.6%, compared to $0.89 for fiscal Q4 2025, and an increase of $0.07, or 8.0%, compared to $0.87 for fiscal Q1 2025.
S&T Bancorp, Inc. is a bank holding company that provides commercial, consumer, and small business banking services. The company’s operations are divided into the following segments: Commercial Real Estate, Commercial and Industrial, Commercial Construction, Business Banking, Consumer Real Estate, and Other Consumer.
8. Nexa Resources S.A. (NYSE:NEXA)
Number of Hedge Fund Holders: 16
Nexa Resources S.A. (NYSE:NEXA) is one of the best cheap small cap stocks to buy now. Scotiabank lifted the price target on Nexa Resources S.A. (NYSE:NEXA) to $14.50 from $14 on June 15 and maintained a Sector Perform rating on the shares, with the firm updating its price targets for Metals & Mining stocks under its coverage. The firm told investors that it believes the copper market is “tighter than you think”, adding that it anticipates the new medium-term supply growth to be insufficient to balance the market.
In a separate development, Nexa Resources S.A. provided an update on the gradual resumption of operations at its Cajamarquilla smelter in Peru on May 29. The update came after the incident reported on May 13, with the company stating that it is gradually resuming production at Cajamarquilla. Due to the temporary disruption, Nexa Resources S.A. estimates a production impact of approximately 7kt (~2% year production) of refined zinc in fiscal Q2 2026, which is anticipated to be recovered during the second half of 2026. The company’s 2026 sales guidance remains unchanged.
Nexa Resources S.A. is involved in the production of zinc in Latin America. The company conducts its operations through the Mining and Smelting segments.
7. Innovex International, Inc. (NYSE:INVX)
Number of Hedge Fund Holders: 24
Innovex International, Inc. (NYSE:INVX) is one of the best cheap small cap stocks to buy now. Jefferies initiated coverage of Innovex International, Inc. (NYSE:INVX) with a Buy rating on June 8 and set a price target of $34. The firm told investors in a research note that Innovex International, Inc. is positioned for a step-up in margins from the second half of 2026, driven by factors such as self-help initiatives and roll-off of low-margin subsea backlog. The firm further stated that it believes the company will benefit from stronger subsea contribution from its OneSubsea alliance ramp, a constructive long-cycle offshore backdrop, and continued commercial momentum.
Innovex International, Inc. also received a rating update from Piper Sandler on May 18. The firm lifted the price target on the stock to $34 from $33 and maintained an Overweight rating on the shares, noting that the Energy Security theme clearly dominated management’s messaging when we look back on fiscal Q1 earnings season.
Innovex International, Inc. provides solutions for both offshore and onshore applications within the oil and gas industry.
6. OceanFirst Financial Corp. (NASDAQ:OCFC)
Number of Hedge Fund Holders: 24
OceanFirst Financial Corp. (NASDAQ:OCFC) is one of the best cheap small cap stocks to buy now. Piper Sandler assumed coverage of OceanFirst Financial Corp. (NASDAQ:OCFC) with a Neutral rating on June 12 and set a price target of $19. The firm stated that it sees “middling profitability” for the bank as it digests the Flushing Financial acquisition.
For reference, OceanFirst Financial Corp. announced on June 1 the completion of its previously announced merger with Flushing Financial Corporation, which is the holding company for Flushing Bank. Management stated that the combination creates a high-performing regional bank with considerable presence across New York, New Jersey, Long Island, and the major metropolitan areas from Massachusetts through Virginia.
OceanFirst Financial Corp. further reported that following the completion of the transactions, the combined company would operate under the OceanFirst brand across 71 retail branches across its footprint. Concurrent with the completion of the merger, In addition, the company also completed its $225 million strategic investment from affiliates of funds managed by Warburg Pincus LLC concurrently with the completion of the merger.
OceanFirst Financial Corp. is a savings and loan holding company involved in the provision of financial services. Its subsidiary is the OceanFirst Bank, which offers commercial and residential financing solutions, deposit services, and wealth management.
5. Innoviva, Inc. (NASDAQ:INVA)
Number of Hedge Fund Holders: 26
Innoviva, Inc. (NASDAQ:INVA) is one of the best cheap small cap stocks to buy now. Nortiva Bio, Inc., which is a wholly owned subsidiary of Innoviva, Inc. (NASDAQ:INVA), announced on June 18 its launch as a clinical-stage biopharmaceutical company dedicated to the development of long-acting oral medicines using its proprietary LYNX™ drug delivery platform. Innoviva, Inc. acquired the LYNX platform from Lyndra Therapeutics, Inc. in 2025, with the platform capable of transforming daily pills into long-acting oral therapies with single doses that last up to a month in multiple therapeutic areas. Management stated that the advancement can improve medication adherence, optimize efficacy and safety, and positively impact patients’ quality of life.
It further stated that the LYNX platform is built on “foundational science from the labs of Robert Langer and Gio Traverso at MIT”, bolstered by years of clinical validation, development, and research, which includes proof of concept in multiple therapeutic areas and a successful Phase 3 study.
Innoviva, Inc. is involved in the development, commercialization, and financial management of biopharmaceuticals.
4. Alkami Technology, Inc. (NASDAQ:ALKT)
Number of Hedge Fund Holders: 27
Alkami Technology, Inc. (NASDAQ:ALKT) is one of the best cheap small cap stocks to buy now. JPMorgan cut the price target on Alkami Technology, Inc. (NASDAQ:ALKT) to $19 from $20 on June 22 and maintained an Overweight rating on the shares, telling investors in a research note that the firm rolled forward its price targets to December 2027 from December 2026 across its banking technology and digital banking coverage. JPMorgan further stated that it holds a constructive view on the group, and stated that “AI-defensibility concerns appear overstated relative to the entrenched workflow, data, and compliance moats these vendors have built.”
The firm further told investors that its highest conviction ideas remain fiscal Q2 and Alkami, adding that the companies operate in a consolidated, duopolistic digital banking market featuring strong retention, long contract durations, and paths to free cash flow expansion. JPMorgan added that Alkami Technology, Inc. screens as its “high-conviction takeout candidate” amid activist pressure.
Alkami Technology, Inc. provides digital banking software solutions to credit unions, credit union service organizations, banks, and service bureaus.
3. Walker & Dunlop, Inc. (NYSE:WD)
Number of Hedge Fund Holders: 30
Walker & Dunlop, Inc. (NYSE:WD) is one of the best cheap small cap stocks to buy now. Keefe Bruyette cut the price target on Walker & Dunlop, Inc. to $63 from $67 on June 15, and maintained an Outperform rating on the shares. The firm told investors in a research note that it is “slightly” more cautious on the commercial real estate outlook.
In a separate development, Walker & Dunlop, Inc. announced on June 24 that it has arranged $128.23 million in refinancing for a four-property, 986-unit multifamily portfolio in Eugene, Oregon. The transaction was arranged by Walker & Dunlop Capital Markets Real Estate Finance on behalf of an experienced local client. It added that the refinancing was led by Steven Natale and included four multifamily communities located throughout Eugene. Natale, managing director of Capital Markets Real Estate Finance at Walker & Dunlop, Inc., stated that the company is continuing to see “strong demand for well-located multifamily communities that offer a compelling combination of affordability, operational stability, and long-term market fundamentals”.
Walker & Dunlop, Inc. is a holding company involved in the provision of real estate and finance services. The company’s operations are divided into the following segments: Capital Markets, Servicing and Asset Management, and Corporate.
2. The Goodyear Tire & Rubber Company (NASDAQ:GT)
Number of Hedge Fund Holders: 38
The Goodyear Tire & Rubber Company (NASDAQ:GT) is one of the best cheap small cap stocks to buy now. Argus cut the price target on The Goodyear Tire & Rubber Company to $9 from $13 on June 4 and maintained a Buy rating on the shares, telling investors in a research note that the company has experienced several big challenges over the past few years, ranging from rising raw material costs, higher capital expenditures, and slower consumer and commercial demand to low-priced Asian imports into the United States, and more recently, to trade and tariff legislation.
However, the firm also stated that it believes that The Goodyear Tire & Rubber Company is meeting all these obstacles head-on with a rational and well-thought-out strategic plan, which is the “Goodyear Forward” plan that focuses on divesting noncore assets, lowering corporate debt, reducing structural costs, and prioritizing higher-margin, premium tire segments. The Goodyear Tire & Rubber Company also received a rating update from JPMorgan on May 11. The firm cut the price target on the stock to $9 from $10 and maintained an Overweight rating on the shares.
The Goodyear Tire & Rubber Company develops, manufactures, distributes, and sells tires. The company’s operations are divided into the following geographical segments: Americas, Europe, the Middle East, Africa, and Asia Pacific.
1. nCino, Inc. (NASDAQ:NCNO)
Number of Hedge Fund Holders: 40
nCino, Inc. (NASDAQ:NCNO) is one of the best cheap small cap stocks to buy now. nCino, Inc. (NASDAQ:NCNO) received a rating update from JPMorgan on June 22. The firm lifted the price target on the stock to $17 from $16 and maintained a Neutral rating on the shares, stating that the firm rolled forward its price targets to December 2027 from December 2026 across its banking technology and digital banking coverage. JPMorgan told investors in a research note that it holds a constructive view on the group, and stated that “AI-defensibility concerns appear overstated relative to the entrenched workflow, data, and compliance moats these vendors have built.”
The firm further told investors that its highest conviction ideas remain fiscal Q2 and Alkami, adding that the companies operate in a consolidated, duopolistic digital banking market featuring strong retention, long contract durations, and paths to free cash flow expansion. JPMorgan added that Alkami screens as its “high-conviction takeout candidate” amid activist pressure.
nCino, Inc. provides cloud-based software applications for financial institutions in the United States and internationally.
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