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.
Hedge Fund Resource Center