In this article, we examine the 11 Best NYSE Stocks Under $5 to Buy.
Investors often refer to stocks trading below $5 per share as small capitalization stocks. According to a MEKETA Investment Group whitepaper, these stocks may be small in size, but taken together, “they represent a large opportunity set.” The whitepaper cites academic research that found that US small-cap stocks have outperformed large-cap stocks over the long-term.
In 2025, however, large-caps have dominated the market. According to LSEG, 2025 is the year that US giants got bigger. This is in reference to the 2025 Russell US Indexes reconstitution (Russell recon), which gave more prominence to mega-cap companies, especially those in tech. LSEG noted that one thing stood out in this year’s Russel recon: “As at the 2025 rank day, the Russell 1000 index (which represents US large-cap stocks) had risen 11.9% since the 2024 rank day, while the Russell 2000 index (which represents US small caps) had risen only 0.9%. It’s been another year of large-cap dominance.”
Be that as it may, Franklin Templeton’s analysts think time has come for market leadership to broaden beyond mega-cap technology. And when this happens, the shift will lift underappreciated and undervalued small-cap equities. “After several years of narrow market leadership dominated by mega-cap technology names, we believe market breadth is poised to expand. Elevated valuations at the top end have prompted investors to rediscover opportunities in mid- and smaller-cap equities, which now trade at multi-decade valuation discounts,” the analysts stated in the global equity outlook 2026 report.
Things are already looking up for small caps, according to Morningstar’s David Sekera. In his December 2025 stock market outlook, Sekera noted that small caps outperformed in November and that they trade at a notably larger discount to fair value than mid- and large caps. He cited the Morningstar US Small Cap Index, which gained 2.48% in November, beating the US Mid Cap Index at 0.64% and the US Large Cap Index, which slipped 0.05%. This outperformance happened in a month when the broad US equity market was essentially flat; the Morningstar US Market Index was up only 0.24%.
Sekera also described small caps as the most undervalued capitalization segment in Morningstar’s coverage. They trade at about a 15% discount to fair value, versus 3% for large caps and 2% for mid-caps.
Against this backdrop, this article highlights 15 NYSE-listed small caps trading under $5. The focus is on names with substantial institutional interest.
Our Methodology
From the Finviz screener, we compiled NYSE penny stocks under $5 and selected 15 backed by elite hedge funds. The hedge fund data was obtained from Insider Monkey’s Q3 2025 database. We ranked the stocks in ascending order of the number of hedge funds holding stakes in them.
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).
Note: The stock price data is as of December 26, 2025.
Best NYSE Stocks Under $5 to Buy
11. Baytex Energy Corp. (NYSE:BTE)
Number of Hedge Fund Holders: 11
Stock Price: $3.16
Baytex Energy Corp. (NYSE:BTE) is one of the best NYSE stocks under $5 to buy. On December 22, TD Cowen’s Menno Hulshof reaffirmed a Buy rating on Baytex Energy Corp. (NYSE:BTE) with a C$5.00 price target.
On the same day, Baytex Energy Corp. approved a 2026 exploration and development budget ranging from C$550 million to C$625 million. The company said this budget is designed to adapt to oil price fluctuations with about 45% of spending front-loaded in the first half of the year; that is assuming a $60 per barrel WTI price. The company aims for average annual production of 67,000 to 69,000 barrels of oil equivalent per day in 2026, a 3% to 5% increase from 2025 levels. According to Baytex, roughly 55% of the budget will go to light oil assets and 45% to heavy oil assets.
Financially, the plan lowers the sustaining breakeven price to $52 per barrel. This will be supported by an optimized cost structure, strong liquidity, and an extended C$750 million credit facility maturing in 2030. Over a three-year outlook, assuming a $60-65 WTI price, the company expects sustainable growth through investments in exploration and infrastructure.
Separately, on December 1, the company launched a cash tender offer to buy back its 7.375% senior notes due 2032. It also outlined plans to fully redeem its 8.500% senior notes due 2030. This, it said, is part of efforts to optimize its debt structure using funds from divesting US assets.
Baytex Energy Corp. (NYSE:BTE) is a Canadian independent oil and gas company engaged in the acquisition, development, and production of crude oil and natural gas. Its operations span across Western Canada and the Eagle Ford shale in Texas. And its production mix is heavily weighted toward crude oil.
10. Grupo Televisa, S.A.B. (NYSE:TV)
Number of Hedge Fund Holders: 12
Stock Price: $2.96
Grupo Televisa, S.A.B. (NYSE:TV) is one of the best NYSE stocks under $5 to buy. On December 11, BofA Securities kept its Neutral rating on Grupo Televisa, S.A.B. (NYSE:TV) stock and increased the price target from $2.60 to $3.30. This change came after factoring in the company’s third-quarter 2025 performance.
BofA’s analysts noted stronger cash generation and are expecting it to reach 5% free cash flow to the firm by 2026. They highlighted Televisa’s moves to lower capital spending and expenses in 2025, which helped support this cash flow improvement. The company also boasts a strong liquidity position, noted the analysts.
But despite the positives, BofA noted that growth is under pressure with a 6% year-over-year drop in results for the first nine months of 2025. Revenue also declined 6.05% over the last twelve months. Key issues that the analysts pointed to include falling user numbers for Televisa’s Sky service, limits on raising broadband prices due to competition, and the eventual need for higher long-term investments in the Cable segment to stay competitive.
Independent of the analyst action, on December 10, Fitch Ratings downgraded Televisa’s long-term foreign and local currency issuer default ratings to ‘BB+’ from ‘BBB-’. The agency also shifted the company to non-investment grade status. Regarding outlook, Fitch assigned a stable rating due to expectations of steady EBITDA and gradual debt reduction through maturities.
Grupo Televisa, S.A.B. (NYSE:TV) is a Mexican multimedia conglomerate that produces and distributes television programming, sports content, and digital media. It also operates cable and satellite pay-TV services.
9. Borr Drilling Limited (NYSE:BORR)
Number of Hedge Fund Holders: 16
Stock Price: $3.96
Borr Drilling Limited (NYSE:BORR) is one of the best NYSE stocks under $5 to buy. On December 10, Borr Drilling Limited (NYSE:BORR) settled its public offering of 21 million common shares, which it priced at $4 each. The settlement delivered the full 84 million, and the company has earmarked the net proceeds for the rig purchase and general corporate needs.
In a separate update, on December 9, the company received a credit rating downgrade from S&P Global Ratings to ‘B’ with a stable outlook. This action also included lowering the rating on the company’s senior secured notes to ‘B+’. According to S&P, the downgrade was triggered by Borr’s agreement to acquire five premium jack-up rigs from Noble Corporation PLC for $360 million.
The $84 million from the public offering was used to fund this acquisition. And it was supplemented by a $165 million issuance of senior secured notes at 10.375% interest due in 2030. The company also relied on seller financing and cash reserves. And after the acquisition, Borr’s net debt stands at around $2 billion. S&P projects the debt-to-EBITDA ratio to stay high at 4.5x to 5.0x through 2025-2026, which will hinder efforts to improve financial flexibility amid volatile oil prices.
Borr Drilling Limited (NYSE:BORR) is an international drilling contractor that owns and operates a modern fleet of jack-up rigs used for shallow-water exploration and production. Its operations span offshore regions including the Americas, Europe, Africa, and Asia.
8. Eve Holding, Inc. (NYSE:EVEX)
Number of Hedge Fund Holders: 20
Stock Price: $4.36
Eve Holding, Inc. (NYSE:EVEX) is one of the best NYSE stocks under $5 to buy. On December 19, Eve Air Mobility, the operating entity of Eve Holding, Inc. (NYSE:EVEX), conducted the first flight of its uncrewed full-scale electric vertical takeoff and landing (eVTOL) prototype. This major development milestone took place at Embraer’s test facility in Gavião Peixoto, São Paulo, Brazil.
The initial test involved a hover flight that confirmed the aircraft’s architecture, integrated propulsion system, and fifth-generation fly-by-wire controls. Assessments covered control laws, energy management, dynamic response, noise levels, and the integration of eight fixed-pitch lifter rotors. According to Eve’s CEO Johann Bordais, the latest milestone confirms their precise execution plan for urban air mobility solutions. And it validates their design approach for reliability, efficiency, and simplicity.
The management stated that they will follow this test with multiple additional flights, gradually expanding the test envelope throughout 2026. This will include transitions to full wingborne operations, aiming for hundreds of flights to gather data for type certification by Brazil’s Civil Aviation Agency.
Separately, on December 8, Cantor Fitzgerald reiterated its Overweight rating on Eve Holding. This action came after Eve announced on December 2 that it had chosen BETA Technologies to supply electric pusher motors for its prototype eVTOL aircraft and future production models. The analysts based their decision on how the partnership strengthens Eve’s development efforts, noting that it validates BETA’s aftermarket services and will help advance Eve’s aircraft building.
Eve Holding, Inc. (NYSE:EVEX) is an urban air mobility company. It develops and commercializes eVTOL aircraft designed for urban transportation and regional connectivity. The company’s portfolio includes eVTOL aircraft, air traffic management solutions, and associated services.
7. BlackBerry Limited (NYSE:BB)
Number of Hedge Fund Holders: 21
Stock Price: $3.99
BlackBerry Limited (NYSE:BB) is one of the best NYSE stocks under $5 to buy. On December 19, RBC Capital reaffirmed its Sector Perform rating on BlackBerry Limited (NYSE:BB) stock and a $4.50 price target. This decision followed BlackBerry’s Q3 FY26 earnings. RBC noted that although BlackBerry beat estimates and raised guidance, the reliance on one-time gains rather than ongoing business improvements kept them cautious.
BlackBerry announced its Q3 2026 results on December 18, in which it reported sequential revenue growth and continued profitability improvements. For example, total revenue reached $141.8 million, exceeding the upper end of prior guidance. This is also a 9% sequential increase from Q2 but a 1% year-over-year dip. Management attributed this to shifts in licensing deals offset by gains in core operations.
The QNX IoT division hit a record quarterly revenue of $68.7 million, a 10% year-over-year growth. This growth was driven by deeper automotive penetration and expansion into adjacent markets like medical and industrial, noted management. Other segments also did well: Secure Communications revenue came in at $67 million, and Licensing and other revenue totaled $6.1 million.
Given the performance, management raised full-year FY26 guidance. They lifted the total revenue midpoint to $531-541 million from the initial $519-541 million. But adjusted EBITDA is unchanged at $82-101 million, non-GAAP EPS at $0.11-0.15, and operating cash flow at $35-40 million. Management cited sustained momentum in QNX and Secure Communications as the key growth drivers.
BlackBerry Limited (NYSE:BB) is a cybersecurity and software company. It develops and provides intelligent security software and services to enterprises and governments. The company’s portfolio includes cybersecurity solutions, unified endpoint management, and QNX software, which powers mission-critical applications in automotive and industrial sectors.
6. AMC Entertainment Holdings, Inc. (NYSE:AMC)
Number of Hedge Fund Holders: 24
Stock Price: $1.68
AMC Entertainment Holdings, Inc. (NYSE:AMC) is one of the best NYSE stocks under $5 to buy. On December 22, AMC Entertainment Holdings, Inc. (NYSE:AMC), along with its subsidiary Muvico, LLC, entered into an agreement with holders of Muvico’s Senior Secured Exchangeable Notes due 2030 to amend the notes’ indenture. The goal is to adjust terms for greater financial flexibility. The amendment revises the exchange rate for converting notes into AMC common stock. The changes permit AMC to carry out one or more at-the-market (ATM) offerings of its common stock for cash, capped at $150 million in total net proceeds. The initial limit was $100 million.
On the same day, AMC Entertainment reported its strongest pre-Christmas weekend since 2021, with over 4 million moviegoers across AMC Theatres in the U.S. and ODEON Cinemas in Europe between December 18–21. The surge was driven by the debut of Avatar: Fire & Ash, which opened to $88 million domestically and $345 million worldwide, alongside four other films that each topped $14 million. The North American box office for the weekend reached about $163 million.
On December 5, AMC Entertainment announced it had sold most of its equity stake in Hycroft Mining (NASDAQ:HYMC) to Sprott Mining, owned by investor Eric Sprott, for about $24.1 million. The deal included 2.34 million Hycroft shares, warrants for 1.34 million shares, and rights to roughly 12,000 future-vesting shares. AMC kept more than 1 million warrants at $10.68 per share and about 64,000 shares, preserving exposure to Hycroft’s future upside.
CEO Adam Aron said the move monetizes much of AMC’s 2022 investment while freeing capital for its core theater business, noting CFO Sean Goodman will remain on Hycroft’s board. Aron added that with strong holiday box office results and a promising film slate ahead, AMC is well-positioned to build on its momentum.
AMC Entertainment Holdings, Inc. (NYSE:AMC) is a movie theater chain operator. It owns and operates hundreds of cinemas across the US and internationally, offering film exhibition, food and beverage services, and premium formats such as IMAX and Dolby Cinema.
5. Clarivate PLC (NYSE:CLVT)
Number of Hedge Fund Holders: 25
Stock Price: $3.41
Clarivate PLC (NYSE:CLVT) is one of the best NYSE stocks under $5 to buy. On December 18, Clarivate PLC (NYSE:CLVT) announced that Nissan Motor Co. (7201.T) has chosen its IPfolio software to modernize intellectual property management. The platform will streamline workflows, improve data visibility, and integrate with other systems via API.
Nissan’s IP chief David Curren, said the move reflects the growing importance of IP in the auto industry and will give the company greater control and efficiency. Clarivate’s Maroun Mourad added that IPfolio combines advanced technology with decades of expertise to help Nissan strengthen its competitive position.
On December 17, Morgan Stanley downgraded Clarivate PLC (NYSE:CLVT) stock from Equalweight to Underweight. The firm also cut its price target for the shares to $3 from $5. The bank expects Clarivate’s business to grow only modestly, describing its outlook as flat to low-single-digit growth for the company overall. It added that Clarivate has limited operating leverage potential, so the bank only anticipates low-single-digit adjusted EBITDA growth.
In the analysts’ view, Clarivate’s main customer groups face budget strain. Morgan Stanley stated that ongoing funding pressures within pharmaceutical, academic, and government sectors are likely headwinds under President Trump’s administration. And these pressures could stunt Clarivate’s bounce back. The analysts also flagged technology‑driven competition, noting that “artificial intelligence could accelerate competitors’ ability to ingest data and compete within Clarivate’s markets.”
Independent of the analyst’s action, Clarivate launched a new AI-powered assistant on December 4. The tool is designed specifically for regulatory compliance teams and aims to streamline compliance workflows, the company stated. The AI assistant, named RegAI Companion, integrates generative AI with Clarivate’s proprietary regulatory intelligence database to provide real-time insights and recommendations. It supports tasks like horizon scanning for upcoming regulations, gap analysis in submission dossiers, and automated summarization of guidance documents.
Clarivate PLC (NYSE:CLVT) is an information services company. It provides data, analytics, and workflow solutions to support innovation across industries including life sciences, academia, intellectual property, and technology. The company’s portfolio includes Web of Science, Cortellis, Derwent, and other platforms that deliver research intelligence, patent analytics, and regulatory insights.
4. Nextdoor Holdings, Inc. (NYSE:NXDR)
Number of Hedge Fund Holders: 26
Stock Price: $2.18
Nextdoor Holdings, Inc. (NYSE:NXDR) is one of the best NYSE stocks under $5 to buy. On December 19, Nextdoor Holdings, Inc. (NYSE:NXDR) incorporated real-time earthquake information from the US Geological Survey (USGS) into its Nextdoor Alerts feature. This update builds on the Alerts system launched in July 2025 in partnership with The Weather Company, Samdesk, and PowerOutage.us. Since then, the system has sent out 3.7 million notifications, a 400% rise in alert volume.
According to the company, the USGS data allows its system to deliver location-specific earthquake alerts that appear prominently at the top of users’ newsfeeds. The system will also leverage the data to facilitate community interactions, where users can discuss alerts, check on one another, share resources, and exchange local updates in real time.
In addition to USGS, Nextdoor recently integrated Waze’s road and traffic data. The objective was to expand the range of everyday and emergency notifications. The company has also made its Alerts Map accessible to public agency partners, which uses the platform’s API to show real-time data from various sources for better coordination during incidents.
Meanwhile, on December 11, Nextdoor was one of the companies that analysts highlighted while offering insights on the Communication Services sector. In particular, Craig-Hallum’s Jason Kreyer reiterated a Buy rating on Nextdoor.
Nextdoor Holdings, Inc. (NYSE:NXDR) is a neighborhood-based social networking company. It operates a platform that connects neighbors, local businesses, and public agencies, enabling community engagement and hyperlocal communication.
3. Under Armour, Inc. (NYSE:UA)
Number of Hedge Fund Holders: 41
Stock Price: $4.41
Under Armour, Inc. (NYSE:UA) is one of the best NYSE stocks under $5 to buy. On December 4, Moody’s downgraded Under Armour, Inc.’s (NYSE:UA) corporate family rating to B1 from Ba3. The agency shifted the outlook to stable from negative and upgraded the speculative grade liquidity rating to SGL-2 from SGL-3.
According to Moody’s, the downgrade was triggered by ongoing difficulties in Under Armour’s operational turnaround. This is driven by cautious retailer orders, sluggish consumer spending on discretionary items, and rising tariffs, noted the agency. Other factors include fierce industry competition, past challenges in restoring brand strength, and recent executive changes. This action builds on an earlier Moody’s downgrade in April 2025 from Ba2 to Ba3, which also highlighted tariff pressures and consumer spending risks impacting the turnaround plan.
However, Moody’s noted that Under Armour, under the leadership of returning founder and CEO Kevin Plank, is taking steps to address concerns. One of the things it’s doing is pursuing a comprehensive strategy to boost brand appeal through revamped products, marketing, and segmentation. The ratings agency pointed out that the strategy is showing early gains, like improved gross margins from reduced promotions and better consumer engagement with premium offerings.
As such, Moody’s anticipates Under Armour’s adjusted debt-to-EBITDA ratio to climb to the high-5x range by March 2026. However, the ratio should ease to low- to mid-3x in fiscal 2027 as restructuring winds down and product updates drive earnings growth.
Under Armour, Inc. (NYSE:UA) is a sportswear and footwear company that designs, manufactures, and distributes performance apparel, footwear, and accessories for athletes and fitness enthusiasts worldwide. The company’s portfolio includes compression shirts, training gear, running shoes, and connected fitness products marketed under the Under Armour brand.
2. UWM Holdings Corporation (NYSE:UWMC)
Number of Hedge Fund Holders: 45
Stock Price: $4.65
UWM Holdings Corporation (NYSE:UWMC) is one of the best NYSE stocks under $5 to buy. On December 19, Jefferies initiated coverage on UWM Holdings Corporation (NYSE:UWMC) stock with a Hold rating and a $5 price target. The firm stressed that UWM has strong structural positioning and high operating leverage heading into the next mortgage cycle. As such, the company is in a great position to benefit when volumes normalize and refinance activity returns.
Jefferies also emphasized UWM’s long-term potential, citing several factors, including cost efficiencies from servicing insourcing expected by 2027, broker channel expansion, and AI-enabled processes. All of these, the firm stated, could enhance both volume and gain-on-sale margins. But despite these positives, Jefferies concludes that the stock price already incorporates “a material portion of the medium-term recovery narrative” for the mortgage industry.
Meanwhile, on December 17, UWM announced a definitive agreement to acquire Two Harbors Investment Corp. (NYSE:TWO) for approximately $1.3 billion. This all-stock transaction is UWM’s first major acquisition, which management stated is intended to transform the company into a top-tier mortgage servicer. In the deal, Two Harbors stockholders will receive 2.3328 shares of UWMC Class A Common Stock for every share of Two Harbors they own. And based on UWM’s closing price as of December 16, the deal values Two Harbors at $11.94 per share, a 21% premium over the 30-day volume-weighted average price of Two Harbors’ common stock.
UWM Holdings Corporation (NYSE:UWMC) is a wholesale mortgage lender. It originates, sells, and services residential mortgage loans through independent mortgage brokers across the US.
1. Transocean Ltd. (NYSE:RIG)
Number of Hedge Fund Holders: 55
Stock Price: $4.01
Transocean Ltd. (NYSE:RIG) is one of the best NYSE stocks under $5 to buy. On December 15, Morgan Stanley initiated coverage of Transocean Ltd. (NYSE:RIG) with an Equal Weight rating and a $4.50 price target. The investment bank frames its stance by placing Transocean relative to peers, stating that the stock is now “middle of the pack” among offshore drillers.
Independent of the analyst action, on December 8, Transocean secured a new contract for six wells offshore Australia. The project is a fixed 320-day campaign slated for commencement in the first quarter of 2027, the company said. It added that the deal adds approximately $130 million to its contract backlog, noting that the figure excludes additional compensation the company will receive for the mobilization and demobilization of the rig to Australian waters. The agreement also includes priced options that, if fully exercised by the operator, could keep the drillship stationed in Australia until early 2030.
Transocean will rely on its ultra-deepwater drillship, the Deepwater Skyros, to operationalize this project. Built in 2013, this drillship is capable of operating in water depths of up to 12,000 feet and can drill to a maximum depth of 40,000 feet. Before its move to Australia, the rig was deployed in West Africa for projects in Angola and the Ivory Coast.
Transocean Ltd. (NYSE:RIG) is an offshore drilling contractor. It owns and operates one of the world’s largest fleets of mobile offshore drilling units, including ultra-deepwater and harsh-environment rigs used by major oil companies for exploration and production.
While we acknowledge the potential of Transocean Ltd. (NYSE:RIG) as an investment, 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 RIG and that has 100x upside potential, check out our report about this cheapest AI stock.
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