On July 3, Lisa Shallet, Morgan Stanley Wealth Management CIO, joined ‘Closing Bell’ on CNBC to share her investment strategy, particularly as stock markets were at record highs and the economy had seemingly sidestepped the anticipated impact of tariffs. Shallet disagreed with this sentiment and stated that it was too early to definitively know the full impact. She explained that most people recognize that the resolution of some tariff policies is still pending, with deals not yet secured from the majority of countries. She partly attributed the Fed’s current on-hold stance to this ongoing uncertainty. However, she observed that the market itself seemed to have moved on, operating under the assumption that any impacts from tariffs would be digestible
Therefore, the prevailing market narrative is now focused on the next 6 to 12 months, with hopes for stimulus, particularly in the form of corporate tax benefits from a new tax bill. This anticipated stimulus would encourage capital spending and productivity. Shallet also suggested that in the very short term, the market is inclined to rise. She cited several indicators supporting this view: the trading activity, the market’s momentum, and its leadership. She noted that the market’s leadership continued to be dominated by the same old MAG7. Furthermore, she mentioned that market positioning was only average, and technical factors like sentiment and positioning did not yet indicate an overbought market.
That being acknowledged, we’re here with a list of the 11 cheap penny stocks to buy now.
A portfolio manager studying various stocks and other securities on a tablet.
Methodology
We used the Finviz stock screener to compile a list of cheap penny stocks that had a forward P/E ratio under 15 and were trading under $5. We then selected the 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 the number of hedge funds that have stakes in them, as of Q1 2025.
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 Cheap Penny Stocks to Buy Now
11. Nexa Resources (NYSE:NEXA)
Share Price as of July 2: $4.98
Forward P/E Ratio as of July 2: 3.45
Number of Hedge Fund Holders: 4
Nexa Resources (NYSE:NEXA) is one of the cheap penny stocks to buy now. On June 30, Nexa Resources announced that the operations at its Cajamarquilla smelter have fully resumed at normal capacity utilization. This follows the successful conclusion of negotiations between the company and its operator employees, who were represented by their labor union, on the evening of June 27.
The temporary suspension of operations at the smelter lasted 3 days. Despite this interruption, Nexa confirmed that its 2025 sales guidance remains unchanged. The company emphasized its commitment to the health and safety of its employees, contractors, and host communities and stated its continued dedication to open and constructive dialogue in compliance with applicable regulations.
The company currently operates 5 mines: 4 long-life underground polymetallic mines, 2 in Peru & 2 in Brazil, and 1 low-cost polymetallic open-pit mine also in Peru. Nexa also operates 3 smelters: 2 in Brazil, and 1 in Peru, which is recognized as the largest smelter in the Americas.
Nexa Resources (NYSE:NEXA) engages in the zinc mining and smelting business worldwide.
10. OPAL Fuels Inc. (NASDAQ:OPAL)
Share Price as of July 2: $2.58
Forward P/E Ratio as of July 2: 1.93
Number of Hedge Fund Holders: 9
OPAL Fuels Inc. (NASDAQ:OPAL) is one of the cheap penny stocks to buy now. During mid-May, OPAL Fuels announced a new joint venture with an affiliate of Republic Services Inc. (NYSE:RSG). The partnership will establish a biogas-to-renewable natural gas/RNG facility at Republic’s Charlotte Motor Speedway Landfill in Concord, North Carolina.
The new RNG facility will be jointly owned by OPAL and its minority partner, the Republic Services affiliate. It is designed to have an initial annual production capacity of ~1.4 million MMBtu. The project involves the conversion of an existing renewable electricity facility at the site, which was previously owned by OPAL. The JV has also secured a new long-term gas rights agreement for the RNG plant.
The facility will utilize proven technology to capture biomethane, which is a natural byproduct of decomposing organic material from the landfill, and convert it into RNG. This RNG serves as a low-carbon and cost-effective transportation fuel.
OPAL Fuels Inc. (NASDAQ:OPAL) produces and distributes renewable natural gas/RNG for use as a vehicle fuel for heavy and medium-duty trucking fleets throughout the US. Republic Services Inc. (NYSE:RSG) offers environmental services in the US and Canada.