On March 6, Dan Niles, founder and portfolio manager at Niles Investment Management, joined CNBC’s ‘Power Lunch’ to provide a cautious perspective on the current market rally, warning investors not to prematurely assume an all-clear signal. Regarding the broader market sell-off and the conflict involving Iran, Niles explained that the primary uncertainty is the duration of the war.
Highlighting the irony of software and MAG7 tech stocks outperforming during the outbreak of hostilities, Niles explained that he anticipated this continued rally in software. Addressing concerns about market complacency and commodity shortages, he argued that price often leads the narrative rather than the news itself. While his personal view is that stocks should be lower, he acknowledges the market is currently signaling a resolution, perhaps reacting to a declining number of missiles being fired daily. He emphasized that the market is attempting to sort through the situation, but he remains a proponent of being hyper-selective.
Niles concluded by advising investors to get messy, referring to a strategy of diversifying into specific subsectors of the S&P 500. He noted that while the MAG7 is down 7% and the S&P is down about 1% year-to-date, other sectors are thriving: utilities are up 9%, and a mix of materials, energy, staples, and industrials are up between 9% and 25%. He points out that the equal-weighted S&P is up 4% and the Russell 2000 is up 3%, suggesting that diversified investors are not suffering as much as those concentrated in tech.
That being said, we’re here with a list of the 12 most promising stocks under $20.
Our Methodology
We used screeners to identify promising stocks that are trading below $20 per share. We limited our final selection to companies that are widely held by hedge funds and have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts.
Note: All data was sourced on March 6.
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).
12 Most Promising Stocks Under $20
12. Permian Resources Corporation (NYSE:PR)
Permian Resources Corporation (NYSE:PR) is one of the most promising stocks under $20. On February 26, Permian Resources reported financial results for 2025, highlighting an 18% year-over-year increase in free cash flow per share to $1.94. The company exceeded its oil production guidance by 5%, averaging 188.6 thousand barrels of oil per day in Q4. Management attributed this success to a highly repeatable business model focused on the Delaware Basin, which saw drilling & completion/D&C costs drop to a record low of $700 per foot.
The company’s strategy for 2026 focuses on doing more with less, guiding to a 5% increase in total production despite a $120 million reduction in capital expenditures. Key to this plan is a further reduction in D&C costs to an anticipated $675 per foot, a 20% decrease compared to 2024 levels. Permian Resources also addressed regional infrastructure constraints by reducing its exposure to ‘Waha’ gas pricing. Through new midstream agreements, Permian Resources Corporation (NYSE:PR) expects its gas realizations to shift from a $0.4 discount to a $0.5 premium relative to Waha benchmarks in 2026.
Permian Resources maintained an aggressive ground game in acquisitions, closing ~700 transactions in 2025 totaling $1.1 billion. These deals added 250 high-rate-of-return locations, ensuring that the company acquired more inventory than it drilled for the third consecutive year.
Permian Resources Corporation (NYSE:PR) is an independent oil and natural gas company that develops crude oil and associated liquids-rich natural gas reserves in the US. The company’s assets primarily focus on the Delaware Basin, which is a sub-basin of the Permian Basin.
11. Axia Energia (NYSE:AXIA)
Axia Energia (NYSE:AXIA) is one of the most promising stocks under $20. On February 27, Axia Energia reported 2025 earnings, signaling the conclusion of its corporate turnaround and a shift toward sustained growth. Under the new ‘AXIA’ brand, which management noted represents a fundamental change in ownership culture rather than just a logo update, the company achieved an adjusted net income of BRL 1.2 billion for Q4, which was a 141% increase year-over-year.
This was supported by record dividend payouts of BRL 8.3 billion and the resolution of major liabilities, including the sale of its stake in Eletronuclear and an agreement with the government regarding compulsory loans. Operational efficiency and capital allocation reached new heights as the company ramped up investments to BRL 9.6 billion for the year, the highest level since 2015.
Management anticipates this trajectory will accelerate to an annual investment level of BRL 12 billion to BRL 14 billion for 2026 and 2027, driven by recent wins in transmission auctions and grid modernization. Axia Energia (NYSE:AXIA) is now prioritizing governance and employee engagement as it prepares to migrate to the Novo Mercado, the highest governance level of the Brazilian stock exchange, on April 1. The company also recently launched its first stock purchase program, which saw 22% of its workforce become shareholders.
Axia Energia (NYSE:AXIA), through its subsidiaries, generates, transmits, and commercializes electricity in Brazil. The company generates electricity through hydroelectric, thermoelectric, nuclear, wind, and solar plants.
10. Banco Santander Brasil (NYSE:BSBR)
Banco Santander Brasil (NYSE:BSBR) is one of the most promising stocks under $20. On February 4, Banco Santander reported financial performance for Q4 2025, signaling a transition toward a more profitable mid-term journey. The bank achieved a quarterly net income of BRL 4.1 billion, representing a 6% year-over-year increase, while maintaining an ROE of 17.6%. Management emphasized that these results are a key intermediate step toward the company’s ultimate target of over 20% ROE, driven by a customer base that has grown to ~64 million active clients.
A core theme of the quarter was the aggressive push into AI-driven transformation and hyper-personalization. The company’s CEO noted that 60% of all customer interactions are now personalized, utilizing a new CRM platform to integrate market data and customer context. The bank is using AI for two main purposes: Efficiency, to automate processes like fraud detection & ombudsman tasks, and Growth, such as the ‘Pitch Maker’ tool, which generates personalized investment advice for advisors in just 30 seconds. This contributed to a reduction in the cost to serve, particularly in the low-income segment, where costs fell by 43% over two years.
Banco Santander saw double-digit growth in its Consumer Finance, SME (Small and Medium Enterprises), and Credit Card segments, all of which grew by ~13% year-on-year. The bank’s funding mix is also evolving favorably, reaching a 50/50 balance between corporate and individual deposits. For 2026, Banco Santander Brasil (NYSE:BSBR) is focusing on disciplined pricing and its Gravity project, which is a massive migration from mainframe systems to a more efficient, modern cloud platform.
Banco Santander Brasil (NYSE:BSBR), together with its subsidiaries, provides various banking products & services to individuals, small & medium enterprises, and corporate customers in Brazil & internationally. It operates in two segments: Commercial Banking and Global Wholesale Banking.
9. United Microelectronics Corporation (NYSE:UMC)
United Microelectronics Corporation (NYSE:UMC) is one of the most promising stocks under $20. On January 28, United Microelectronics Corporation/UMC announced results for Q4 2025, reporting an EPS of $0.1294. The company achieved a 4.5% sequential revenue increase to TWD 61.8 billion, supported by favorable foreign exchange rates and a record-breaking performance in its 22-nanometer business, which grew 31% quarter-over-quarter.
For the full-year 2025, UMC delivered a 5.3% revenue increase in US dollar terms, supported by a 12.3% rise in total wafer shipments. The company completed its new Phase III facility at Fab 12i in Singapore, which is now instrumental in helping customers diversify their supply chains. Furthermore, United Microelectronics Corporation (NYSE:UMC) expanded its global footprint through high-profile collaborations, including a 12-nanometer partnership with Intel and a memorandum of understanding with Polar Semiconductor. These initiatives underscore the company’s shift toward high-value specialty platforms such as embedded High Voltage and Non-Volatile Memory.
For Q1 2026, UMC expects wafer demand to remain firm and projects another year of growth. Management set a capital expenditure budget of $1.5 billion for 2026, focusing on capacity and technology advancements in areas like advanced packaging and silicon photonics to meet AI and networking demands.
United Microelectronics Corporation (NYSE:UMC) operates as a semiconductor wafer foundry in Taiwan, China, Hong Kong, Japan, Korea, the US, Europe, and internationally. The company manufactures and sells integrated circuits.
8. Telefônica Brasil (NYSE:VIV)
Telefônica Brasil (NYSE:VIV) is one of the most promising stocks under $20. On February 23, Telefônica Brasil delivered a strong financial performance for 2025, beating market expectations with a reported EPS of $0.22. The company achieved total revenue of BRL 15.6 billion in Q4, which was a 7.1% increase driven by momentum in both mobile and fiber services. Net income for the year rose 11.2% to BRL 6.2 billion, while free cash flow grew to BRL 9.2 billion.
These results allowed Telefônica Brasil to fulfill its commitment to shareholders, reaching a payout ratio of 103.4% of annual net income through dividends, interest on capital, and share buybacks. Operational growth was spearheaded by the mobile postpaid segment, which expanded to 70.8 million customers, and the rapid acceleration of 5G technology, now available in over 700 Brazilian cities. In the fixed-line business, Telefônica Brasil connected 7.8 million homes to fiber, supporting a 12% year-over-year increase in FTTH accesses.
The company’s focus on ‘Vivo Total’, a convergent offer combining mobile and fiber, successfully reduced fiber churn to a historic low of 1.4%. Additionally, B2B digital services saw a 29.5% revenue jump, fueled by rising demand for cloud, cybersecurity, and IoT solutions. For 2026, management reaffirmed its strategy of disciplined capital allocation and digital diversification. Telefônica Brasil (NYSE:VIV) plans to continue distributing at least 100% of its net income to shareholders and has already announced BRL 7 billion in scheduled distributions for the coming year.
Telefônica Brasil (NYSE:VIV), together with its subsidiaries, operates as a mobile telecommunications company in Brazil.
7. Vodafone Group Public Limited Company (NASDAQ:VOD)
Vodafone Group Public Limited Company (NASDAQ:VOD) is one of the most promising stocks under $20. On March 2, Vodafone entered a partnership with Amazon Leo, a low Earth orbit/LEO satellite broadband network, to provide high-speed connectivity to mobile masts in remote regions of Europe and Africa. By using satellite backhaul instead of expensive fiber-optic or fixed wireless links, Vodafone can more affordably deploy 4G and 5G base stations in hard-to-reach areas.
The service offers significant performance capabilities, with download speeds of up to 1 Gbps and upload speeds of 400 Mbps, ensuring that rural communities receive reliable, modern network access. The rollout will begin in 2026, starting with mobile base stations in Germany and other European markets before expanding across Africa through Vodafone Group Public Limited Company’s (NASDAQ:VOD) subsidiary, called Vodacom.
Additionally, the satellite network will serve as a critical tool for network resilience, providing a vital backup for emergency services if terrestrial fiber links are damaged by flooding or other infrastructure failures. This initiative aligns with Vodacom’s ‘Vision 2030’ goals, which aim to reach 260 million customers and increase smartphone penetration across the African continent. Amazon Leo currently has 200+ satellites in orbit, with 100s more prepared for launch to build out a constellation of thousands.
Vodafone Group Public Limited Company (NASDAQ:VOD) provides telecommunication services in Germany, the UK, the rest of Europe, Turkey, and South Africa. It offers mobile & fixed services, connectivity business solutions (like digital services, IoT, and financial services), and IoT platforms.
6. Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC)
Ericsson (NASDAQ:ERIC) is one of the most promising stocks under $20. On March 2, Ericsson and Intel (NASDAQ:INTC) announced an expanded strategic collaboration aimed at accelerating the transition from 6G research to commercial reality. This partnership focuses on developing AI-native 6G infrastructure, integrating AI across the entire network value chain, including the Radio Access Network/RAN, Core, and Edge.
By pooling Ericsson’s expertise in large-scale network deployments with Intel’s advanced compute and silicon technologies, the companies aim to create a more open, power-efficient, and secure foundation for next-gen connectivity. The collaboration centers on the concept of ‘AI for networks and Networks for AI,’ designed to make future 6G deployments more responsive through real-time sensing and programmable intelligence.
A key component of this effort involves future Ericsson Silicon powered by Intel’s most advanced process nodes and Intel Xeon-powered Cloud RAN solutions. These innovations are intended to help operators manage the massive compute demands of 6G while maintaining cost-effectiveness and supply chain security. As the industry moves toward global 6G standardization, Ericsson (NASDAQ:ERIC) and Intel are emphasizing ecosystem readiness to ensure a seamless shift for global operators.
Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC), together with its subsidiaries, provides mobile connectivity solutions to communications service providers, enterprises, and the public sector in the Americas, Europe, the Middle East, Africa, Northeast Asia, Southeast Asia, Oceania, and India.
5. Coupang Inc. (NYSE:CPNG)
Coupang Inc. (NYSE:CPNG) is one of the most promising stocks under $20. On February 26, Coupang announced its Q4 2025 earnings, which were significantly impacted by a major data incident involving a former employee who illegally accessed 33 million user accounts. Although a forensic investigation by Mandiant and Palo Alto Networks confirmed that no sensitive financial data or passwords were compromised, the event triggered a visible slowdown in December.
Product Commerce revenue grew 12% on a constant currency basis, which was a decline from 18% in the previous quarter, as some customers deleted accounts or removed payment methods. To rebuild trust, Coupang issued ~$1.2 billion in customer compensation vouchers and has seen engagement trends begin to stabilize in early 2026. The company missed earnings expectations in Q4 with a reported loss of $0.01 per share due to increased investments and the data incident’s impact on working capital.
Total net revenue reached $8.8 billion, up 14% on a constant currency basis, while consolidated adjusted EBITDA fell 37% year-over-year to $267 million. Despite the domestic headwinds in Korea, Coupang’s Developing Offerings segment saw record revenues of $1.4 billion. Taiwan remains a standout success, achieving triple-digit revenue growth as the company rapidly scales its last-mile logistics network to cover 70% of the island’s geography. Looking toward 2026, Coupang Inc. (NYSE:CPNG) anticipates muted growth, forecasting Q1 revenue growth between 5% and 10%.
Coupang Inc. (NYSE:CPNG), together with its subsidiaries, owns & operates a retail business through its mobile applications and internet websites in South Korea and internationally. It operates through the Product Commerce and Developing Offerings segments.
4. Haleon (NYSE:HLN)
Haleon (NYSE:HLN) is one of the most promising stocks under $20. On February 25, Haleon reported financial performance for the full-year 2025, marked by the introduction of its ‘Win as One’ strategy and an organic revenue growth of 3%. While results in North America were tempered by low consumer confidence and a weak cold and flu season, the company saw strong expansion in its EMEA, Latin America, and Asia-Pacific regions.
Total revenue reached £11.03 billion, supported by the Oral Health sector, which outperformed with ~8% organic growth. These results allowed the company to maintain or gain market share in 60% of its business segments. Profitability was driven by aggressive productivity initiatives, including a 26% reduction in SKU complexity and optimized logistics. Despite market challenges, the company continued to reinvest in its future, increasing spending on R&D by 7.7%.
For 2026, Haleon (NYSE:HLN) expects organic revenue growth to accelerate to between 3% and 5%, supported by a new operating model designed to increase agility. The company has created a Chief Growth Officer role and restructured into six specific operating units to better capture regional opportunities. Management plans to deliver high single-digit adjusted operating profit growth and has allocated £500 million for share buybacks in the coming year.
Haleon (NYSE:HLN), together with its subsidiaries, researches, develops, manufactures, and sells various consumer healthcare products in North America, Europe, the Middle East, Africa, Latin America, and the Asia Pacific.
3. Ford Motor Company (NYSE:F)
Ford Motor Company (NYSE:F) is one of the most promising stocks under $20. On March 6, Reuters reported that Ford Motor is recalling 1.74 million vehicles in the US due to two distinct software defects affecting rearview camera displays. According to the National Highway Traffic Safety Administration/NHTSA, these malfunctions can result in blank, flipped, or inverted images when a vehicle is in reverse, significantly reducing rearward visibility and increasing the risk of a crash.
Despite the scale of the recall, Ford reported that it is currently unaware of any accidents or injuries linked to either technical issue. The first action involves ~849,310 Ford Bronco (2021–2026) and Ford Edge (2021–2024) models, where a module may overheat and trigger a temporary five-minute thermal shutdown of the camera feed. The second action affects 889,950 vehicles, including the Ford Escape (2020–2022), Lincoln Corsair (2020–2022), and Lincoln Aviator (2020–2024). In these SUVs, a software glitch can cause the touchscreen to display inverted buttons and camera guidelines immediately after the vehicle is started.
Ford plans to resolve both defects through software updates, though the necessary patches are still under development. The company anticipates that the software for the inverted image issue will be available by late June 2026. Once the solutions are finalized, Ford will notify affected owners by mail with instructions to visit a dealership for a free repair.
Ford Motor Company (NYSE:F) develops, delivers, and services Ford trucks, sport utility vehicles, commercial vans & cars, and Lincoln luxury vehicles in the US, Canada, the UK, Mexico, and internationally. It operates through Ford Blue, Ford Model e, Ford Pro, and Ford Credit segments.
2. Takeda Pharmaceutical Company Limited (NYSE:TAK)
Takeda Pharmaceutical Company Limited (NYSE:TAK) is one of the most promising stocks under $20. On March 2, Takeda and Protagonist Therapeutics announced that the US FDA accepted the New Drug Application and granted Priority Review for rusfertide. This investigational, first-in-class hepcidin mimetic is intended to treat adults with polycythemia vera/PV, a rare blood cancer characterized by the dangerous overproduction of red blood cells.
Given its potential to address significant unmet needs, the FDA has set a Prescription Drug User Fee Act action date for Q3 2026. The regulatory submission is supported by data from the Phase 3 VERIFY study, along with long-term results from the Phase 2 REVIVE and THRIVE trials. Clinical findings showed that rusfertide, when added to the standard of care, more than doubled response rates compared to standard treatments alone. Key benefits included sustained control of hematocrit levels below 45%, a significant reduction in the need for painful phlebotomy procedures, and improvements in patient-reported symptoms such as fatigue.
Under the 2024 collaboration agreement, Takeda is managing the regulatory strategy and future global filings, while Protagonist maintains an option to co-commercialize the drug in the US through a profit-sharing structure. Rusfertide works by mimicking the hormone hepcidin to regulate iron homeostasis, effectively targeting the underlying mechanism of the disease. If approved, it would provide a novel subcutaneous treatment option for patients who currently struggle to manage blood thickness and the associated risk of life-threatening thrombotic events like strokes or embolisms.
Takeda Pharmaceutical Company Limited (NYSE:TAK) researches, develops, manufactures, markets, and out-licenses pharmaceutical products in Japan and internationally. It offers pharma products for gastroenterology, rare diseases, plasma-derived therapies, immunology, oncology, and neuroscience.
1. Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR)
Petrobras (NYSE:PBR) is one of the most promising stocks under $20. On March 5, Petrobras reported financial results for 2025, despite a challenging external environment marked by a 14% year-over-year decline in Brent crude prices to $69 per barrel. To mitigate this drop, the company achieved an 11% increase in total oil production, reaching milestones like the 1 million barrel-per-day mark at both the Búzios and Tupi/Iracema fields.
These operational gains supported a net income of $19.6 billion and an adjusted EBITDA of $42.5 billion, underscoring the company’s ability to maintain strong cash flow through high-quality pre-salt assets and increased lifting efficiency. The company’s downstream and logistics sectors also reached peak performance levels, with refineries hitting a 92% utilization rate. High-value products like diesel, gasoline, and aviation fuel accounted for ~74% of total sales, while the expansion into renewable energy saw the launch of sustainable aviation fuel and green diesel initiatives.
Additionally, Petrobras strengthened its long-term outlook by incorporating 1.7 billion barrels of oil into its proven reserves, achieving its highest reserve replacement level in a decade and ensuring sustained production capacity for the future. For 2026, management reaffirmed a focus on capital discipline, production growth, and operational excellence. Petrobras (NYSE:PBR) invested over $20 billion in 2025, a 22% increase year-over-year, with a heavy emphasis on exploration and production.
Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) explores, produces, and sells oil and gas in Brazil and internationally. It operates through three segments: Exploration & Production; Refining, Transportation & Marketing; and Gas & Low Carbon Energies.
While we acknowledge the potential of PBR 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 PBR and that has 100x upside potential, check out our report about this cheapest AI stock.
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