On January 23, Ryan Detrick, Carson Group chief market strategist, appeared on CNBC’s ‘Squawk Box’ to discuss the latest market trends and the outlook for 2026. Detrick provided an optimistic outlook for the S&P 500 and forecasted gains of 12% and 15% for 2026. Addressing the 10-year Treasury yield, he explained that he is not overly concerned with its current levels. His base case suggested that there may be fewer rate cuts this year than the market currently anticipates. He pointed to market resilience and noted that high-yield credit markets remained stable, a clue that underlying conditions are strong.
The discussion then moved into specific growth drivers, including the impact of massive capital draws for AI investment, which naturally lift yields. When asked if investors should fear an overvalued market, Detrick argued that while tech valuations are high, the bull market is supported by dual tailwinds of rising earnings and profit margins. He placed a heavy emphasis on productivity, which hit 4.9% in Q3. He described this as a magic elixir that allows for higher earnings growth and wages while putting a cap on inflation. He asserted that in a low-hire, low-fire economy, these productivity gains are likely to continue surprising the economy to the upside. He generally recommends a well-diversified, equity-overweight portfolio rather than picking just one or two winners.
That being said, we’re here with a list of the 11 cheap hot stocks to invest in right now.
Our Methodology
We sifted through the Finviz stock screener to compile a list of cheap stocks that had a forward P/E ratio under 15. From that, we sorted stocks by the highest 3-month performance. We then selected 11 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of their 3-month performance. We have also added the hedge fund sentiment for each stock, as of Q3 2025.
Note: All data was sourced on February 3.
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).
11 Cheap Hot Stocks to Invest In Right Now
11. IAMGold Corporation (NYSE:IAG)
Number of Hedge Fund Holders: 43
3-Month Performance: 56.00%
IAMGold Corporation (NYSE:IAG) is one of the cheap hot stocks to invest in right now. On January 26, Scotiabank increased its price target for IAMGold to $23 from $15 while maintaining a Sector Perform rating. This adjustment is part of a broader update across the firm’s Gold & Precious Minerals coverage, driven by higher gold and silver forecasts. The firm noted that these revised projections are supported by ongoing economic and geopolitical uncertainty, as well as robust buying activity from central banks.
On January 23, Canaccord raised the firm’s price target on IAMGold Corporation (NYSE:IAG) to C$32 from C$23.50, while maintaining a Buy rating.
Additionally, on January 19, Bank of America raised the price target on IAMGold to $20.50 from $17.50 and kept a Buy rating. The firm increased targets across the North American precious metals group, noting in a research note that many macro drivers pushing gold prices higher have intensified. Additionally, BofA anticipates that company capital returns for Q4 2025 will be strong.
IAMGold Corporation (NYSE:IAG), through its subsidiaries, operates as a gold producer and developer in Canada and Burkina Faso.
10. Magnera Corporation (NYSE:MAGN)
Number of Hedge Fund Holders: 28
3-Month Performance: 56.19%
Magnera Corporation (NYSE:MAGN) is one of the cheap hot stocks to invest in right now. On January 7, Vertical Research analyst Kevin McCarthy downgraded Magnera to Hold from Buy, while setting a price target of $16.
However, on January 6, Wells Fargo analyst Gabe Hajde raised the firm’s price target on Magnera to $18 from $16 and maintained an Overweight rating. The firm noted that 2025 proved more difficult than initially anticipated and is awaiting a catalyst to trigger a recovery. A primary concern remains the K-shaped economy, as the financial health of low-end consumers continues to be poor.
In Q4 2025, Magnera Corporation (NYSE:MAGN) reported revenue of $839 million and adjusted EBITDA of $90 million, bringing full-year totals to $3.2 billion and $362 million, respectively. While infection prevention wipes saw 10% year-over-year growth and the consumer solutions segment increased its revenue share to 53%, overall revenue in the Americas and the Rest of World declined by 9% and 3%, respectively.
Magnera Corporation (NYSE:MAGN) manufactures and sells non-woven and related products worldwide. It sells its products primarily into consumer-oriented end markets.
