In this article, we will take a look at some of the fundamentally strong penny stocks to invest in.
We have all heard the old saying, “A penny makes a dime,” highlighting the idea that every little effort counts toward a bigger goal. This is particularly true in the case of stocks because every large stock was once a very cheap stock. Small investments at the right time and in the right stock can indeed lead to high levels of wealth, so always remember, a penny makes a dime, and a dime makes a dollar.
This leads us to the formal definition of a penny stock, which is a share that typically trades at a low price, usually under $5. When considering such stocks, it’s important to see whether these stocks are backed by solid financials, promising growth potential, and real business fundamentals. For savvy investors, these are hidden gems that go a long, long way.
Our Methodology
We have compiled a list of the 12 best penny stocks to invest in using the Finviz market screener. These stocks, with a price of less than $5, belong to various industries, from biotechnology and biopharmaceutical to marketing technology. These are then ranked in ascending order according to their upside potential, calculated using one-year price targets by Yahoo Finance.
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).
12. Uniti Group Inc. (NASDAQ:UNIT)
Upside Potential as of July 4, 2025: 32.30%
Analysts at TD Cowen have reaffirmed their “Buy” rating on Uniti Group Inc. (NASDAQ:UNIT), while maintaining a price target of $9.00. With such an optimistic outlook, the firm has reiterated its label as the top investment idea in the sector, alongside T-Mobile and Equinix.
From in-line revenue and EBITDA during the first quarter to an impressive dividend yield of around 14%, the company’s financials tell a somewhat compelling story. While the results matched key guidance metrics, the stock nearly fell. What the analysts believe is that the dip is due to a potential misunderstanding of pro forma financials and investor hesitation following the company’s change to a REIT status. However, these will impact Uniti Group Inc. (NASDAQ:UNIT) only in the short run.
As TD Cowen underscores, the company demonstrates solid bookings, with strand counts sold to hyperscalers assumed to be at least 30 times higher than they were several years ago, all thanks to the demand for generative AI. Having said that, analysts remain confident in what they call “twin engines of commercial and residential fiber super-cycles,” anticipating more than 90% upside for UNIT.
Uniti Group Inc. (NASDAQ:UNIT) is a U.S.-based internally managed real estate investment trust that provides fiber and other wireless solutions. With a market capitalization of $1.068 billion, the company focuses on the acquisition and development of mission-critical communications infrastructure.
11. Amplify Energy Corp. (NYSE:AMPY)
Upside Potential as of July 4, 2025: 171.69%
Benchmark has reaffirmed its Buy rating on Amplify Energy Corp. (NYSE:AMPY), with an unchanged price target of $11.00, citing the optimism surrounding the sale of Eagle Ford non-operated production. This potential surge of over 200% from the current levels means that this company is in the right direction to meet its strategic objectives.
The research firm highlights that moves like these alleviate investor worries concerning potential acquisitions, leverage problems, and dilution of the company’s Beta field prospects. This strategic initiative has the potential to improve the production and capital expenditure guidance for Amplify Energy Corp. (NYSE:AMPY) in August.
The results of the company’s next Beta well are expected within this quarter, which could advance the current data on the offshore California development that the analysts believe will shape the future for Amplify Energy Corp. (NYSE:AMPY).
Amplify Energy Corp. (NYSE:AMPY) is a Texas-based company that, along with its subsidiaries, acquires, exploits, and develops oil and natural gas properties. With a commitment to optimizing production and generating free sustainable cash flow, the company has properties in Oklahoma, the Rockies, federal waters offshore Southern California, East Texas/North Louisiana, and Eagle Ford.
10. Sana Biotechnology, Inc. (NASDAQ:SANA)
Upside Potential as of July 4, 2025: 192.48%
Morgan Stanley has assumed coverage on Sana Biotechnology, Inc. (NASDAQ:SANA) with an Overweight rating and a price target of $12.00. This optimism is totally in line with market sentiments that acknowledge the platform’s potential to develop tailored therapies driven by engineered cells.
The research firm’s confidence underpins the recent 12-week and 6-month T1D data for what the firm calls an “early proof point that helps validate the platform.” This means that the current price is nothing when the scale of opportunities of the company’s hypoimmune platform is considered. The analysts believe that the risk/reward profile is closely tied to the upside ahead of sustained pipeline progress. While the risk may be high, the reward is even higher.
The year-to-date returns of 93% delivered by Sana Biotechnology, Inc. (NASDAQ:SANA) is a testament to the company’s efforts, particularly in the context of Type 1 Diabetes – a market with the potential to reach as high as $24.36 billion by 2031.
Sana Biotechnology, Inc. (NASDAQ:SANA) is a Washington-based biotechnology company that uses engineered cells as medicines across the United States. The core offerings of the company include UP421, SC451, SC291, and SG299. Founded in 2018, the company has agreements with Beam Therapeutics Inc. and Harvard College.