In this article, we will look at the 11 Hot Penny Stocks to Buy Right Now.

On July 1, Royce Investment released its Q2 2025 small-cap research report. The report noted that after a turbulent and bearish first quarter, the Russell 2000 rebounded strongly, gaining 8.5% in Q2 2025. This recovery was part of a broader market resilience seen across all market caps despite ongoing volatility and uncertainty.

Notably, the quarter’s returns did not follow a typical pattern based on market capitalization. The report highlighted that both mega-cap stocks and higher growth stocks led the gains. The Russell Microcap Index surged 15.5% whereas the large-cap Russell 1000 rose 11.1%. However, the Russell 2000 remained below its previous peak from late 2024, down about 10.1% from that high.

Despite the strong second quarter, year-to-date returns were mixed due to the steep declines in the first quarter. Small and micro-cap stocks were still negative for the year, with the Russell 2000 down -1.8% and the Russell Microcap down -1.1%. The report noted that volatility remained a key theme in 2025. VIX, which is a measure of market fear, was unusually calm except for a spike after “Liberation Day” in April. Royce Investment believes that volatility is expected to rise again due to trade uncertainties, including tariffs on the European Union and threats to other countries. On the bright side, valuations for the small cap remain attractive with the Russell 2000 trading near a 25-year low relative to large-cap stocks based on the EV/EBIT metric.

With that, let’s take a look at the 11 hot penny stocks to buy right now.

Our Methodology

To curate the list of 11 hot penny stocks to buy right now, we used the Finviz stock screener and Yahoo Finance. Using the screener, we aggregate a list of penny stocks (trading below $5) that have gained more than 30% during the past 6 months. Next, we cross-checked the 6-month performance of each stock from Yahoo Finance and ranked the stocks in ascending order of the number of hedge funds sourced from the Insider Monkey Q1 2025 database. Please note that the data was recorded on July 4th, 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 Hot Penny Stocks to Buy Right Now

11. Ultrapar Participações S.A. (NYSE:UGP)

Price: $3.38

6-months Performance: 32.03%

Number of Hedge Fund Holders: 11

Ultrapar Participações S.A. (NYSE:UGP) is one of the 11 Hot Penny Stocks to Buy Right Now. On May 7, the company announced its results for the fiscal first quarter of 2025. The company reported facing some market challenges during the quarter.

During the first quarter of 2025, Ultrapar Participações S.A. (NYSE:UGP) reported a recurring EBITDA of BRL 1.322 billion. Management noted that this figure excludes a significant negative impact of BRL 139 million from the share of loss in Hidrovias, which experienced one of the worst drops in its North and South corridors. As a result, when accounting for this loss, the EBITDA fell 9% year-over-year. Moreover, the net income for the quarter reached BRL 502 million, reflecting a 20% year-over-year decline considering the Hidrovias loss.

On the bright side, Ultragaz’s LPG sales volume grew 1% year-over-year, driven by a 2% increase in bottled LPG sales due to stronger market demand. In addition, Ipiranga’s recurring EBITDA rose 6% year-over-year to BRL 826 million, benefiting from higher margins due to inventory gains from fuel price adjustments and resolution of tax irregularities.

Ultrapar Participações S.A. (NYSE:UGP) is a Brazilian conglomerate primarily engaged in the distribution and retail of automotive fuels and related products. It operates through 5 main business segments, including Gas Distribution (Ultragaz), Fuel Distribution (Ipiranga), Chemicals (Oxiteno), Storage (Ultracargo), and Drugstores (Extrafarma).

10. Lloyds Banking Group plc (NYSE:LYG)

Price: $4.16

6-months Performance: 54.65%

Number of Hedge Fund Holders: 13

Lloyds Banking Group plc (NYSE:LYG) is one of the 11 Hot Penny Stocks to Buy Right Now. On July 2nd, Lloyds Banking Group plc (NYSE:LYG) announced partnering with British AI startup UnlikelyAI to test a groundbreaking neuro-symbolic AI technology aimed at improving innovation and customer experience in banking.

The Neuro Symbolic AI approach combines neural networks with symbolic reasoning. The hybrid method aims to produce AI outputs that are more accurate, transparent, explainable, and free from hallucinations. UnlikelyAI was founded by William Tunstall-Pedoe, who also created the Evi voice assistant acquired by Amazon and integrated into Alexa.

Lloyds Banking Group plc (NYSE:LYG) is conducting a proof-of-concept experiment within its Innovation Sandbox to explore how this AI can be used responsibly across the Group to deliver consistent, accurate, and compliant support for customers and staff.

Lloyds Banking Group plc (NYSE:LYG) is a major UK-based financial services company that primarily serves retail and commercial customers. It operates through three main business segments, including Retail, Commercial, Insurance, Pensions, & Investment Banking.