In this article, we will look at the 14 Best NYSE Penny Stocks to Buy Now.
Small-cap and penny stocks are having a moment at the start of the new year. The Russell 2000 index is already up by more than 5%, a significant gain given that the S&P 500 is up by just 1.7% over the same period. The rally comes amid growing expectations that the companies are poised to deliver market-beating results while trading at highly discounted valuations.
Growing expectations of further monetary policy easing from the Federal Reserve also continue to bolster the case for penny and small-cap stocks. In addition, the stocks look set to benefit from investors pairing exposure to mega-cap tech stocks currently trading at premium valuations.
According to Jeffrey Hirsch, editor of the Stock Trader’s Almanac, the companies are also benefiting from the January effect as investors scoop up smaller names, especially those that suffered from tax-loss selling in the fourth quarter.
[The] Russell 2000 has had a banner January this year handily outpacing the other major indexes and appears to be benefiting from a strong ‘January Effect’ … Should this momentum persist, Russell 2000 could continue to exhibit strength this February, Hirsch said.
According to Miller Value Partners portfolio manager Daniel Lysik, fundamentals for small-cap companies are improving amid a resilient US economy. Additionally, they appear to be trading at a discount, as their 1-year price-to-earnings multiples are 30% below those of large caps.
During the past quarter, small caps showed some encouraging signs as their earnings growth slightly exceeded that of larger companies, the first time in thirteen quarters, said Lysik.
Small caps tend to do better in midterm election years and average a 1.3% advance in February. In contrast, the S&P 500 tends to average 0.3%. According to Paul Ciana, a technical analyst at Bank of America Securities, the seasonal pattern for February already shows hawkish bias towards interest rates and localized strengthening opportunities towards small caps.
With the S&P SmallCap 600 already up by more than 5% for the year, now would be the best time to take a look at some of the best NYSE penny stocks trading under $5.
Our Methodology
We sifted through the Finviz stock screener to compile a list of the top NYSE penny stocks trading under $5. We then selected 14 stocks that were popular among elite hedge funds and had upside potential of over 30%. We have also added Q3 2025 hedge fund sentiment for each stock sourced from Insider Monkey’s database. Finally, we ranked the stocks based on the number of hedge funds that hold stakes in them.
Note: The data is of February 6
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows 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).
Best NYSE Penny Stocks to Buy Now
14. Nouveau Monde Graphite Inc. (NYSE:NMG)
Share Price: $2.09
Stock Upside Potential: 107.33%
Number of Hedge Fund Holders: 3
Nouveau Monde Graphite Inc. (NYSE:NMG) is one of the best NYSE penny stocks to buy now. On January 30, H.C. Wainwright reiterated a Buy rating on Nouveau Monde Graphite Inc. (NYSE:NMG) but cut the price target to $5.50 from $7.50.
The price target cut is in response to a recent equity raise, as it is expected to result in significant dilution. A pushback on the projection of the first production in the first half of 2028 has also impacted valuation, leading to the new price target. Consequently, the research firm has revised its discounted cash flow model for the company. It expects it to yield a net asset value of $919 million or $3.51 a share. The new valuation takes into account the company’s cash balance of $68.8 million minus $11.6 million in debt.
Meanwhile, Maxim Group initiated coverage of Nouveau Monde Graphite Inc. with a Buy recommendation on January 20. Wall Street remains bullish on Nouveau Monde Graphite Inc. following the signing of multiple commercial agreements for Phase 2 graphite production. It has already inked a 7-year off-take agreement with the Canadian government for the uptake of 30,000 tons per annum of graphite concentrate.
Nouveau Monde Graphite Inc. (NYSE:NMG) develops an integrated, carbon-neutral, “ore-to-battery” graphite business in Québec. It focuses on mining (Matawinie Mine) and processing high-purity natural graphite into active anode materials for electric vehicle (EV) batteries, energy storage systems, and defense industries, aiming to supply the Western market.
13. Auna SA (NYSE:AUNA)
Share Price: $4.76
Stock Upside Potential: 53.36%
Number of Hedge Fund Holders: 5
Auna SA (NYSE:AUNA) is one of the best NYSE penny stocks to buy now. On January 16, analysts at Jefferies initiated coverage of Auna SA (NYSE:AUNA) with a Buy rating and a $9 price target. According to the research firm, the stock is on the cusp of significant upside while trading at just 4.5x 2026 estimated adjusted earnings.
The research firm expects the company’s underlying growth to accelerate owing to a ramp-up of Mexico operations, supported by a $500 million Sojitz-backed expansion and the Trecca PPP project in Peru. The company is positioned to benefit from operating in a large, underpenetrated market where private insurance covers about 10% of the population.
The fact that healthcare spending is poised to increase also positions the company to benefit. In the third quarter, robust growth in Peru and Colombia helped offset the decline in Mexico. The company inked a new strategic partnership with Sojitz as part of an investment plan in Mexico ahead of expected growth.
Auna SA (NYSE:AUNA) is a major Latin American healthcare company operating a vertically integrated network of hospitals, clinics, and outpatient facilities in Peru, Colombia, and Mexico. It focuses on high-complexity care, particularly oncology, and managing prepaid health plans.
