In this article, we will look at the 11 Best Affordable Stocks Under $5 to Invest in.
On July 18, Truist’s Keith Lerner appeared on CNBC’s ‘Closing Bell’ to talk about the latest news affecting markets, and more.
He stated that the market deserves the benefit of the doubt, as what got us here is the performance of growth sectors like technology and communication services. Industrials also played their role going at all-time highs, and banks continue to perform positively as well. Lerner thus stated that looking at the economic data, we see that “the economy may be cooling, but it is certainly not collapsing.”
READ ALSO: 13 Best Long Term Low Volatility Stocks to Buy Now and 10 Hot Penny Stocks to Invest in Now.
He further reasoned that initial jobless claims are decreasing, retail sales are showing solid trends, and the earnings estimates for the market continue to rise. The underlying trend in the market thus seems positive to him. With these optimistic trends in view, let’s look at the best affordable stocks under $5 to invest in.
A financial analyst looking through a microscope at stocks to determine their market value.
Our Methodology
We used Finviz to compile a list of top stocks with a forward P/E below 15 and stock price under $5. We then selected the top 11 stocks with the highest number of hedge fund holders as of Q1 2025, sourcing the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund sentiment.
Note: All data was recorded on July 18.
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).
11 Best Affordable Stocks Under $5 to Invest In
11. BRF S.A. (NYSE:BRFS)
Forward P/E: 9.7
Stock Price: $3.60
Number of Hedge Fund Holders: 16
BRF S.A. (NYSE:BRFS) is one of the best affordable stocks under $5 to invest in. On May 19, Barclays downgraded BRF S.A. (NYSE:BRFS) to Equal Weight from Overweight, bringing the price target down to $3.50 from $5.
The firm told investors in a research note that Marfrig announced a deal for the purchase of the remaining 47% of outstanding BRFS shares, fully consolidating the company into its operations.
The firm thus cited merger economics as the primary reason behind the downgrade. It stated that the opt-out price of R$19.89 implies a $3.50 price per ADR at current currency rates, which provides minimal potential upside given current trading prices.
BRF S.A. (NYSE:BRFS) produces and distributes fresh and frozen protein foods. The company’s offerings include frozen processed meats, specialty meats, prepared entrees, sliced products, and even products like cream cheese, butter, margarine, sweet specialties, and more. Its operations are divided into the Brazil, International, and Other segments.
10. Gerdau S.A. (NYSE:GGB)
Forward P/E: 7.79
Stock Price: $2.85
Number of Hedge Fund Holders: 17
Gerdau S.A. (NYSE:GGB) is one of the best affordable stocks under $5 to invest in. On July 17, Scotiabank lowered the firm’s price target on Gerdau S.A. (NYSE:GGB) to R$20 from R$31, keeping a Sector Perform rating on the shares.
The firm told investors in a research note that the outlook for global steel demand has dwindled with rising trade tensions and uncertainty prompted by constantly changing tariff announcements.
While the overall outlook for the industry remains challenging, Scotiabank noted that it sees a more promising outlook in the US compared to the steel markets in Latin America.
Gerdau S.A. (NYSE:GGB) produces and commercializes steel products. The company’s operations are divided into the following segments: Brazil Operation, North America Operation, South Africa Operation, and Special Steels Operation.
9. Borr Drilling Limited (NYSE:BORR)
Forward P/E: 10.23
Stock Price: $1.88
Number of Hedge Fund Holders: 18
Borr Drilling Limited (NYSE:BORR) is one of the best affordable stocks under $5 to invest in. On July 1, SEB Equities upgraded Borr Drilling Limited (NYSE:BORR) to Hold from Sell with a $1.90 price target.
On July 2, Borr Drilling Limited (NYSE:BORR) made an announcement detailing the commitments it received from certain commercial banks to increase existing super senior RCF (SSRCF) to $200 million, reallocate the existing $45 million Guarantee Facility from super senior to senior secured, and add a new $35 million senior secured RCF, subject to a $100 million equity raise.
Borr Drilling Limited (NYSE:BORR) also stated that it attained more favorable terms on the financial covenants in these facilities, which includes a drop in the minimum liquidity covenant.
Management expects changes to the facilities, when coupled with the proposed $100 million equity raise announced by Borr Drilling Limited (NYSE:BORR), to raise the company’s available liquidity by more than $200 million.
This would strengthen Borr Drilling Limited’s (NYSE:BORR) financial position and support its long-term strategy for the pursuit of potential value-added growth opportunities and industry consolidation.
Borr Drilling Limited (NYSE:BORR) provides offshore drilling services to the oil and gas industry. It operates through Dayrate and Integrated Well Services (IWS) segments. The Dayrate segment provides rig charters and ancillary services, while the IWS segment offers integrated well services through Opex and Akal.
8. Ambev S.A. (NYSE:ABEV)
Forward P/E: 12.9
Stock Price: $2.35
Number of Hedge Fund Holders: 21
Ambev S.A. (NYSE:ABEV) is one of the best affordable stocks under $5 to invest in. On July 11, UBS analyst Rodrigo Alcantara maintained a Hold rating on Ambev S.A. (NYSE:ABEV) and set a price target of $2.50.
Ambev S.A. (NYSE:ABEV) reported a 0.7% growth in consolidated volumes in Q1 2025, supported by positive performances in Brazil and Latin America South. These trends offset declines in Canada and Central America, where volumes were primarily affected by soft industries.
Normalized EBITDA rose by 12.7% with margin expanding by 180bps, primarily supported by costs and expenses management discipline.
Ambev S.A. (NYSE:ABEV) produces, distributes, and sells beverages. Its offerings include carbonated soft drinks, beer, and other non-alcoholic and non-carbonated products. The company’s operations are divided into the following geographical segments: Brazil, Central America and the Caribbean (CAC), and Canada.
7. B2Gold Corp. (NYSE:BTG)
Forward P/E: 6.16
Stock Price: $3.33
Number of Hedge Fund Holders: 23
B2Gold Corp. (NYSE:BTG) is one of the best affordable stocks under $5 to invest in. On July 16, National Bank analyst Don DeMarco raised the firm’s price target on B2Gold Corp. (NYSE:BTG) to C$8 from C$7.75 while keeping an Outperform rating on the shares.
The rating came after B2Gold Corp. (NYSE:BTG) announced positive results of a Feasibility Study on its 100% owned Gramalote gold project in the Department of Antioquia, Colombia (the “Gramalote Project”) on July 14.
The study showed a meaningful gold production profile with favorable metallurgical characteristics. Management expects to file a technical report related to the feasibility study within 45 days.
B2Gold Corp. (NYSE:BTG) is an exploration company that acquires and develops mineral properties. Its operations are divided into the following segments: Fekola Mine, Fekola Regional, Masbate Mine, Otjikoto Mine, Goose Project, Other Mineral Properties, and Corporate and Other.
6. Banco Bradesco S.A. (NYSE:BBD)
Forward P/E: 7.04
Stock Price: $2.81
Number of Hedge Fund Holders: 24
Banco Bradesco S.A. (NYSE:BBD) is one of the best affordable stocks under $5 to invest in. On May 8, Itau BBA analyst Pedro Leduc downgraded Banco Bradesco S.A. (NYSE:BBD) to Market Perform from Outperform without a price target.
Banco Bradesco S.A. (NYSE:BBD) reported a 15.3% year-over-year growth in total revenue in fiscal Q1 2025 to R$32.3 billion, while operating expenses for the quarter experienced a 12.3% year-over-year increase to R$15.0 billion.
The company also reported R$5.86 billion in recurring net income, up 8.6% quarter-over-quarter and 39.3% year-over-year.
Banco Bradesco S.A. (NYSE:BBD) provides financial and insurance services. Its operations are divided into the Banking and Insurance segments. The Banking segment manages the banking activities, while the Insurance segment covers health, auto, life, accident, property insurance, and more.
5. Clarivate Plc (NYSE:CLVT)
Forward P/E: 6.53
Stock Price: $4.23
Number of Hedge Fund Holders: 25
Clarivate Plc (NYSE:CLVT) is one of the best affordable stocks under $5 to invest in. On July 18, Jefferies downgraded Clarivate Plc (NYSE:CLVT) to Hold from Buy, bringing the price target down to $4.50 from $5.20.
The firm told investors that although Clarivate Plc (NYSE:CLVT) reported better-than-expected fiscal Q1 2025 results, investors are underestimating the time it would take for the company to unlock value, either through divestitures or organic means.
Jefferies sees Clarivate Plc’s (NYSE:CLVT) 2026 revenue as flat with 2025 levels, and risk to its business operations due to the current administration’s plans to cut funding for the National Institutes of Health and post-secondary education.
The firm thus sees Clarivate Plc (NYSE:CLVT) trading sideways in the near term, justifying the downgrade.
Clarivate Plc (NYSE:CLVT) provides global information, workflow solutions, and analytics. The company operates through the following segments: Academia and Government (A&G), Intellectual Property (IP), and Life Sciences and Healthcare (LS&H).
4. New Gold Inc. (NYSE:NGD)
Forward P/E: 9.03
Stock Price: $4.30
Number of Hedge Fund Holders: 28
New Gold Inc. (NYSE:NGD) is one of the best affordable stocks under $5 to invest in. In a report released on July 7, Michael Siperco from RBC Capital maintained a Buy rating on New Gold Inc. (NYSE:NGD) and set a price target of $6.00.
New Gold Inc. (NYSE:NGD) reported first-quarter consolidated production of 52,186 ounces of gold and 13.6 million pounds of copper at an all-in sustaining expense of $1,727 per gold ounce sold.
Q1 2025 gold production accounted for around 15% of the midpoint of annual consolidated production guidance of 325,000 to 365,000 ounces of gold, prompting New Gold Inc. (NYSE:NGD) to be slightly ahead of its planned Q1 of 14%.
New Gold Inc. (NYSE:NGD) is a Canada-based intermediate gold mining company that acquires, explores, and develops natural resources properties, including gold. It operates two core-producing assets in the country: the Rainy River gold mine and the New Afton copper-gold mine. New Gold Inc. (NYSE:NGD) also holds other Canadian-focused investments.
3. Coty Inc. (NYSE:COTY)
Forward P/E: 13.3
Stock Price: $4.92
Number of Hedge Fund Holders: 29
Coty Inc. (NYSE:COTY) is one of the best affordable stocks under $5 to invest in. In a report released on July 15, Lauren Lieberman from Barclays maintained a Sell rating on Coty Inc. (NYSE:COTY) with a price target of $4.50.
Coty Inc. (NYSE:COTY) reported a 2% year-over-year drop in its net revenue in Q3 to $4.64 billion, including a 2% negative impact from FX. Reported operating income for the quarter also declined 56% year-over-year to $225.6 million.
Coty, Inc. (NYSE:COTY) is a beauty company that operates a portfolio of brands in color cosmetics, fragrance, and skin and body care. Its Prestige segment operates an array of luxury brands.
The company markets and sells its products in more than 121 countries across the globe. Coty, Inc.’s (NYSE:COTY) mass beauty products are primarily sold through supermarkets, hypermarkets, drugstores, department stores, e-commerce retailers, and other channels.
2. Nokia Oyj (NYSE:NOK)
Forward P/E: 14.11
Stock Price: $4.75
Number of Hedge Fund Holders: 29
Nokia Oyj (NYSE:NOK) is one of the best affordable stocks under $5 to invest in. On July 18, JPMorgan analyst Sandeep Deshpande lowered the firm’s price target on Nokia Oyj (NYSE:NOK) to EUR 5.60 from EUR 6.05 while keeping an Overweight rating on the shares.
Nokia Oyj (NYSE:NOK) reported a 3% year-over-year decline in fiscal Q1 2025 net sales on a constant currency and portfolio basis, primarily due to a challenging prior-year comparison in Nokia Technologies.
Network Infrastructure rose 11% on a constant currency and portfolio basis, while Cloud and Network Services grew 8%.
Nokia Oyj’s (NYSE:NOK) full-year 2025 outlook remained unchanged, with a comparable operating profit of between EUR 1.9 billion and 2.4 billion and free cash flow conversion from comparable operating profit of between 50% and 80%.
Nokia Oyj (NYSE:NOK) provides network infrastructure, software, and technology services. Its operations are divided into the following segments: Mobile Networks, Network Infrastructure, Cloud and Network Services, and Nokia Technologies.
1. Playtika Holding Corp. (NASDAQ:PLTK)
Forward P/E: 5.76
Stock Price: $4.49
Number of Hedge Fund Holders: 31
Playtika Holding Corp. (NASDAQ:PLTK) is one of the best affordable stocks under $5 to invest in. In a report released on July 1, Alicia Reese from Wedbush maintained a Buy rating on Playtika Holding Corp. (NASDAQ:PLTK) with a price target of $11.50.
Playtika Holding Corp. (NASDAQ:PLTK) reported an 8.6% sequential and 8.4% year-over-year growth in revenue in fiscal Q1 2025, reaching $706.0 million. DTC platforms reported $179.2 million in revenue, reflecting a 2.6% sequential growth and a 4.5% year-over-year rise.
While GAAP net income for the quarter decreased 42.3% year-over-year to $30.6 million, Playtika Holding Corp. (NASDAQ:PLTK) reported $36.2 million in adjusted net income, increasing 34.1% sequentially and decreasing 39.6% year-over-year.
Playtika Holding Corp. (NASDAQ:PLTK) is a developer of mobile games that owns and manages around 15 games. Its Playtika Boost Platform offers a proprietary technology that supports a portfolio of games and live game operations services. The company’s offerings include casual games, casino-themed games, and free-to-play mobile games.
Its game portfolio includes Slotomania, Bingo Blitz, House of Fun, Caesars Slots, World Series of Poker, Best Fiends, June’s Journey, Solitaire Grand Harvest, and Board Kings. These games are available on Google Play Store and iOS App Store.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
Hedge Fund Resource Center