Earlier on January 27, Matt Stucky from Northwestern Mutual joined CNBC’s ‘Closing Bell Overtime’ to discuss a shifting market landscape where investor focus is broadening beyond mega-cap stocks. Stucky observed that earnings revisions are beginning to improve across various sectors, including small caps, which is helping to unlock value dislocations that have accumulated over the last three years. He argued that for small-cap outperformance to continue, the market needs to see consistent upward earnings revisions and a continued compression of the valuation spread between small and large caps.
Regarding portfolio positioning, Stucky expressed interest in mid-caps, small-caps, international stocks, and investment-grade fixed income, moving away from a primary focus on US mega-caps. While he clarified that he still respects the quality and earnings growth of mega-cap tech companies, he expressed concern over the unusual level of market concentration and the risks associated with potential disappointments in that sector. He suggested that the next leg in the trade for AI may lie with small and mid-cap companies that use AI products to unlock productivity. Because these smaller companies are more labor-intensive than mega-cap tech firms, Stucky believes that they may possess more earnings leverage if AI proves to be a major productivity enhancer over the next few years.
That being said, we’re here with a list of the 11 most undervalued penny stocks to buy right now.
Our Methodology
We used screeners to identify stocks that are trading below a forward P/E of 15 as well as below $5 per share, and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
Note: All data was sourced on February 23.
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 Most Undervalued Penny Stocks to Buy Right Now
11. Citius Oncology Inc. (NASDAQ:CTOR)
Citius Oncology Inc. (NASDAQ:CTOR) is one of the most undervalued penny stocks to buy right now. On February 11, Citius Oncology entered into an exclusive distribution agreement with Uniphar to expand the availability of its oncology treatment, LYMPHIR, throughout Western and Eastern Europe. This partnership marked Citius Oncology’s third major international agreement, following similar arrangements in the Middle East, Turkey, and Southern Europe.
Under the terms, Uniphar will manage market access and distribution through country-specific managed access programs. While LYMPHIR is currently FDA-approved in the US, it has not yet received commercial marketing authorization in Europe; therefore, it will be provided solely to patients with relapsed or refractory cutaneous T-cell lymphoma/CTCL who have limited treatment options under local legal frameworks.
LYMPHIR is a targeted immunotherapy designed specifically for patients with Stage I-III CTCL who have already undergone at least one systemic therapy. The drug functions as a recombinant fusion protein that combines an IL-2 receptor binding domain with diphtheria toxin fragments to selectively identify and destroy cancerous T-cells. By inhibiting protein synthesis within these targeted cells, LYMPHIR induces cell death and depletes immunosuppressive regulatory T-cells.
Citius Oncology Inc. (NASDAQ:CTOR) develops and commercializes innovative targeted oncology therapies. It also develops LYMPHIR, an orphan indication for the treatment of adult patients with relapsed or refractory cutaneous T-cell lymphoma, a rare form of non-Hodgkin lymphoma.
10. Ceragon Networks Ltd. (NASDAQ:CRNT)
Ceragon Networks Ltd. (NASDAQ:CRNT) is one of the most undervalued penny stocks to buy right now. On February 17, Ceragon Networks reported Q4 2025 revenue of $82.3 million, which was a 23% decline compared to the same period in 2024. This downward trend was reflected in the full-year results, with 2025 revenue totaling $338.7 million, down 14.1% from the previous year.
Management expressed optimism for 2026, setting revenue guidance at $355 to $385 million. Growth for Ceragon Networks Ltd. (NASDAQ:CRNT) is expected to be fueled by the launch of four new products, including 60 GHz point-to-multipoint solutions, and a multimillion-dollar private network contract recently secured in the Asia-Pacific region.
The CEO highlighted that while Q1 2026 will likely follow typical seasonal patterns, strong bookings from India and stable Tier 1 demand in North America provide confidence in a stronger H2 performance. The company is actively diversifying its revenue streams through private networks in the mining and energy sectors and is mitigating supply chain costs, such as rising memory prices, by qualifying secondary sources.
Ceragon Networks Ltd. (NASDAQ:CRNT) provides wireless transport solutions for cellular operators and other wireless service providers in North America, Europe, Africa, the Asia Pacific, the Middle East, India, and Latin America.
