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.
9. Alcoa Corporation (NYSE:AA)
Number of Hedge Fund Holders: 40
3-Month Performance: 58.35%
Alcoa Corporation (NYSE:AA) is one of the cheap hot stocks to invest in right now. On January 27, Morgan Stanley downgraded Alcoa to Equal Weight from Overweight, while raising its price target to $64 from $52. The firm noted that while the company continues to benefit from high aluminum prices on the London Metal Exchange, the stock’s significant outperformance compared to its peers in recent months has resulted in a more balanced risk-reward profile.
On January 23, Bank of America raised the firm’s price target on Alcoa to $38 from $33 with an Underperform rating on the shares. The adjustment follows Alcoa’s Q4 2025 results and reflects higher estimates as well as an increase in the firm’s target based on mark-to-market pricing for the quarter.
On the same day, BMO Capital lowered the firm’s price target on Alcoa Corporation (NYSE:AA) to $65 from $67 with a Market Perform rating. The firm stated that while the company posted a Q4 earnings beat, it was due to a one-time CO2 credit. For 2026, the firm noted that aluminum production and shipment targets generally align with estimates, but alumina targets are mixed.
Alcoa Corporation (NYSE:AA), together with its subsidiaries, engages in the bauxite mining, alumina refining, aluminum production, and energy generation business in Australia, Brazil, Canada, Iceland, Norway, Spain, the US, and internationally. The company has two segments: Alumina and Aluminum.
8. Century Aluminum Company (NASDAQ:CENX)
Number of Hedge Fund Holders: 36
3-Month Performance: 59.65%
Century Aluminum Company (NASDAQ:CENX) is one of the cheap hot stocks to invest in right now. On January 26, Century Aluminum announced that it is set to take a 40% stake in a JV with Emirates Global Aluminium/EGA to build the first primary aluminum smelter in the US in nearly 50 years. Located in Inola, Oklahoma, the project is expected to involve an investment of ~$4 billion, with EGA retaining the remaining 60% ownership. Construction is scheduled to begin by the end of 2026, with production aimed to start before the decade concludes.
The partnership increased the smelter’s planned annual capacity from 600,000 to 750,000 metric tons, a move that would more than double total US aluminum output. This expansion is designed to reduce the country’s heavy reliance on imports, which currently fulfill about 85% of domestic industrial demand. The project is expected to create 1,000 permanent jobs at the site while supporting an additional 4,000 positions during the construction phase.
The initiative aligns with broader efforts to support domestic production of aluminum, a designated critical mineral, following the doubling of import tariffs to 50% last year. These economic conditions have pushed the Midwest aluminum premium to record highs, creating a favorable environment for domestic manufacturing.
Century Aluminum Company (NASDAQ:CENX), together with its subsidiaries, produces and sells standard-grade and value-added primary aluminum products in the US and Iceland.
7. Sun Country Airlines Holdings Inc. (NASDAQ:SNCY)
Number of Hedge Fund Holders: 24
3-Month Performance: 60.07%
Sun Country Airlines Holdings Inc. (NASDAQ:SNCY) is one of the cheap hot stocks to invest in right now. On February 3, TD Cowen downgraded Sun Country Airlines to Hold from Buy and lowered its price target to $18 from $21. The firm indicated that current share prices appear to reflect a high probability, exceeding 90%, that the recently announced merger with Allegiant Travel Company (NASDAQ:ALGT) will receive regulatory approval. The firm suggests the stock is effectively fully valued relative to the anticipated acquisition consideration.
Earlier on January 20, Wolfe Research downgraded Sun Country Airlines Holdings Inc. (NASDAQ:SNCY) from Outperform to Peer Perform. This sentiment was posted by the firm following the announcement of a merger agreement with Allegiant Travel Company. Under the terms of the cash and stock transaction, the acquisition has an implied value of $18.89 per Sun Country share.
On January 12, as well, JPMorgan downgraded Sun Country Airlines from Overweight to Neutral, setting a $19 price target following the news of its merger with Allegiant Travel Company.
Sun Country Airlines Holdings Inc. (NASDAQ:SNCY) is an air carrier company that operates scheduled passenger, air cargo, charter air transportation, and related services in the US, Latin America, and internationally. It has two segments: Passenger and Cargo.
6. Amentum Holdings Inc. (NYSE:AMTM)
Number of Hedge Fund Holders: 39
3-Month Performance: 63.88%
Amentum Holdings Inc. (NYSE:AMTM) is one of the cheap hot stocks to invest in right now. On January 15, UBS increased its price target for Amentum to $37 from $33 while maintaining a Neutral rating and noted a selective market environment where stock reactions have been mixed despite stable supply chains and strong demand.
The firm observed that while commercial original equipment build rates are improving and supporting a shift toward normalized valuations, the Defense and Government IT sectors remain heavily influenced by geopolitical narratives and budget cycles rather than immediate earnings catalysts. Additionally, while UBS highlighted robust growth in the aftermarket segment, it cautioned investors regarding a potential deceleration risk in H2 of the year.
On January 14, Truist also raised its price target for Amentum Holdings Inc. (NYSE:AMTM) to $42 from $34 with a Buy rating on the shares. As part of a 2026 government services sector outlook, the firm noted that the One Big Beautiful Bill is expected to enhance organic growth expectations for the latter half of 2026 and 2027. However, Truist cautioned that increased defense spending may lead to further reductions in civil budgets.
Amentum Holdings Inc. (NYSE:AMTM) provides engineering and technology solutions in the US and internationally. It operates through two segments: Digital Solutions and Global Engineering Solutions.
5. Americas Gold and Silver Corporation (NYSEAMERICAN:USAS)
Number of Hedge Fund Holders: 11
3-Month Performance: 68.92%
Americas Gold and Silver Corporation (NYSEAMERICAN:USAS) is one of the cheap hot stocks to invest in right now. On January 22, H.C. Wainwright raised its price target for Americas Gold and Silver Corporation to $9.75 from $4.90 while keeping a Buy rating. This adjustment follows the release of the company’s Q4 2025 production results and is primarily attributed to an increase in the firm’s price deck.
On January 20, Americas Gold and Silver Corporation (NYSEAMERICAN:USAS) announced the discovery of eight new high-grade silver-copper-antimony splay veins at its Galena Complex. These veins, collectively known as the 034 Vein Complex, were identified via exploration drilling from the 5200 Level completed in late 2025. Significant drill intercepts include 4,458 g/t Ag, 3.34% Cu, and 1.50% Sb over a 0.5-meter true width.
The complex shows potential economic continuity over a vertical extent of 100 meters (between the 5200 and 5500 Levels) and remains open for further growth. Preliminary internal estimates for the eight new veins suggest an exploration target of 550-650k tonnes. Located near existing infrastructure, the 034 Vein Complex is currently being evaluated for inclusion in the company’s 2026 mine plan.
Americas Gold and Silver Corporation (NYSEAMERICAN:USAS), together with its subsidiaries, explores, develops, and produces mineral properties in the Americas. The company explores for gold, silver, zinc, lead, and other by-products.
4. Teva Pharmaceutical Industries Limited (NYSE:TEVA)
Number of Hedge Fund Holders: 60
3-Month Performance: 77.33%
Teva Pharmaceutical Industries Limited (NYSE:TEVA) is one of the cheap hot stocks to invest in right now. On January 30, Barclays analyst Glen Santangelo raised the price target for Teva Pharmaceuticals to $38 from $35 with an Overweight rating. Following Teva Pharmaceuticals’ Q4 2025 report, the firm updated its financial model and expressed continued confidence in the stock’s current valuation.
A day before that, Scotiabank raised the price target on Teva Pharmaceuticals to $40 from $35 while maintaining an Outperform rating. The firm is positive on the stock following Q4 2025 results and noted that the company’s execution continues to exceed expectations.
In other news, on January 14, Teva Pharmaceutical Industries Limited (NYSE:TEVA) announced that the New England Journal of Medicine published Phase 3 data from the SPACE trial, confirming that AJOVY (fremanezumab-vfrm) significantly reduces monthly migraine and headache days in children and adolescents (ages 6–17). Following its August 2025 FDA approval for pediatric patients weighing 45 kg or more, AJOVY is now the first and only CGRP antagonist available for both adults and children.
Teva Pharmaceutical Industries Limited (NYSE:TEVA) develops, manufactures, markets, and distributes generic and other medicines & biopharmaceutical products in the US, Europe, Israel, and internationally.
3. Pangaea Logistics Solutions Ltd. (NASDAQ:PANL)
Number of Hedge Fund Holders: 13
3-Month Performance: 80.33%
Pangaea Logistics Solutions Ltd. (NASDAQ:PANL) is one of the cheap hot stocks to invest in right now. On January 28, B. Riley raised its price target for Pangaea Logistics to $11.50 from $9 while maintaining a Buy rating on the shares. The firm noted that while dry bulk shipping rates softened toward the end of the year, demand is expected to remain stable in 2026.
This outlook is supported by anticipated global GDP growth, healthy consumption in China, and limited vessel recycling. Additionally, the firm highlighted that operators are maintaining strong liquidity, allowing them to navigate potential market downturns and take advantage of high asset prices.
Earlier in Q3 2025, Pangaea Logistics Solutions Ltd. (NASDAQ:PANL) reported a 10.2% year-over-year increase in revenue to $168.7 million, beating analyst estimates. The company posted an adjusted EPS of $0.17, outperforming the projected $0.03. These results were driven by high shipping activity during the Arctic trade season, the integration of 15 Handysize vessels, and time charter equivalent rates that averaged 10% above market benchmarks due to the company’s specialized ice-class fleet.
Pangaea Logistics Solutions Ltd. (NASDAQ:PANL), together with its subsidiaries, provides seaborne dry bulk logistics and transportation services to industrial customers worldwide.
2. Ironwood Pharmaceuticals Inc. (NASDAQ:IRWD)
Number of Hedge Fund Holders: 22
3-Month Performance: 229.33%
Ironwood Pharmaceuticals Inc. (NASDAQ:IRWD) is one of the cheap hot stocks to invest in right now. On January 5, Craig-Hallum upgraded Ironwood to Buy from Hold and increased the price target to $5.70 from $3.80.
On the same day, Citizens analyst Jason Butler upgraded Ironwood Pharmaceuticals from Market Perform to Outperform with an $8 price target. This sentiment was posted as the firm cited restored confidence in the core strength of Linzess. Butler noted that the drug’s performance eases concerns regarding the company’s debt obligations and allows for a renewed focus on the long-term value of its pipeline asset, apraglutide.
Butler estimates that Linzess could generate approximately $1.5 billion in brand profit for Ironwood Pharmaceuticals Inc. (NASDAQ:IRWD) before its loss of exclusivity. According to the firm’s research note, the cash flow from this asset is expected to be more than sufficient to meet the company’s existing debt requirements.
Ironwood Pharmaceuticals Inc. (NASDAQ:IRWD) is a biotechnology company that develops and commercializes therapies for gastrointestinal and rare diseases in the US and internationally.
1. Sandisk Corporation (NASDAQ:SNDK)
Number of Hedge Fund Holders: 61
3-Month Performance: 239.72%
Sandisk Corporation (NASDAQ:SNDK) is one of the cheap hot stocks to invest in right now. On February 2, Barclays analyst Tom O’Malley nearly doubled his price target for SanDisk to $750 from $385 while maintaining an Equal Weight rating. This sentiment was announced by the firm following SanDisk’s FQ2 2026 earnings beat.
On January 30, Bank of America raised the price target on Sandisk Corporation (NASDAQ:SNDK) to $850 from $390 while maintaining a Buy rating. This adjustment followed FQ2 report where both revenue and EPS exceeded guidance, alongside FQ3 projections that were described as massively above Street expectations.
Following the report, the firm significantly increased its FY 2026 estimates. Revenue expectations were raised to $15.7 billion from $10.9 billion, while EPS estimates grew to $39.50 from $16.21, reflecting higher margins and profitability than previously anticipated.
Sandisk Corporation (NASDAQ:SNDK) develops, manufactures, and sells data storage devices and solutions using NAND flash tech in the US, Europe, the Middle East, Africa, Asia, and internationally.
While we acknowledge the potential of SNDK to grow, 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 SNDK and that has 100x upside potential, check out our report about this cheapest AI stock.
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