In this piece we will look at the 5 Best Undervalued Stocks to Buy Under $5. Please visit 10 Best Undervalued Stocks to Buy Under $5 if you’d like to see an extended list and how we came up with the list of Best Undervalued Stocks to Buy Under $5.
5. Gerdau S.A. (NYSE:GGB)
Forward P/E Ratio: 8
Number of Hedge Fund Holders: 22
Gerdau S.A. (NYSE:GGB) is one of the Best Undervalued Stocks to Buy Under $5. Gerdau S.A. (NYSE:GGB) has gained more than 5% since its fiscal Q1 2026 earnings and more than 25% over the past 6 months. It is also undervalued with a forward price to earnings ratio of 8, below the sector average of 16.76.
The improvement in share price is partly driven by expanding North American operations. Wall Street expects a modest 6.2% upside from the current levels. On April 28, the company released its fiscal Q1 2026 earnings. During the quarter, the company reported adjusted EPS of R$0.51, which missed the estimates of R$0.676. The revenue came in at R$16.72 billion, slightly below the expectations of R$17.06 billion.
Notably, the North American segment delivered its best performance since 2022, driven by strong data center demand. The segment accounted for more than 75% to the total adjusted EBITDA of R$3 billion. The company maintained its 2026 CapEx guidance at R$4.7 billion and expects to generate positive free cash flow throughout the year.
Gerdau S.A. (NYSE:GGB) produces and commercializes steel products. The company’s operations are divided into the following segments: Brazil Operation, North America Operation, South Africa Operation, and Special Steels Operation.
4. Banco Bradesco S.A. (NYSE:BBD)
Forward P/E Ratio: 6.76
Number of Hedge Fund Holders: 24
Banco Bradesco S.A. (NYSE:BBD) is one of our Best Undervalued Stocks to Buy Under $5. The stock trades at a forward price to earnings ratio of around 6.7, which is below the sector average of 11. Moreover, analysts see more than 31% upside for the stock over the next 12 months.
Recently, on June 8, Banco Bradesco S.A. (NYSE:BBD) was reiterated with a Hold rating at TD Cowen. The firm did not disclose any price targets. The rating comes almost a month after the company released its fiscal Q1 2026 earnings. The stock has fallen around 6.4% since the release. During the quarter, the company reported R$36.9 billion in revenue, which fell significantly short of the estimated R$36.18 billion.
On the bright side, Banco Bradesco expanded its loan portfolio to reach R$1.09 trillion, reflecting 8.4% year-over-year increase. This was driven by a strategic shift toward secured lending products like payroll-deductible loans and real estate. Despite missing the Q1 guidance, management maintained its 2026 guidance and projected loan growth of around 9.5%, risk-adjusted Net Interest Income growth of 12.5% for the full year.
Formerly known as Banco Brasileiro de Descontos SA, Banco Bradesco (NYSE:BBD) is a public company based in Brazil that engages in the Banking Services Industry Group. It operates as a wide-ranging commercial bank in terms of credit operations, total assets, and the volume of funding and deposits. It boasts a broad range of banking and financial services and products for key national and international institutions, companies, and individuals in Brazil and abroad.
3. Clarivate Plc (NYSE:CLVT)
Forward P/E Ratio: 3.25
Number of Hedge Fund Holders: 30
Clarivate Plc (NYSE:CLVT) is one of the Best Undervalued Stocks to Buy Under $5. On June 8, Clarivate Plc (NYSE:CLVT) announced that it had appointed Simon Webster as President of its Intellectual Property segment, and he resumed the position effective June 10.
Management noted that Webster replaces Maroun S. Mourad, as he is leaving the company. The transition period is expected to run through the end of September. The company also highlighted that Webster brings strong credentials linked to the role, as he previously led CPA Global before it merged with Clarivate, giving him deep familiarity with the IP business and its market dynamics. CEO Matti Shem Tov highlighted his track record in scaling software and technology-enabled services as key reasons for the appointment.
The company highlighted that the strategic focus for the IP segment remains centered on AI-enhanced intelligence, better sales execution, and disciplined operations. Webster is enthusiastic to leverage Clarivate’s data assets, software, and workflow solutions to deliver stronger customer outcomes across the innovation lifecycle.
During the same press release, the company also reaffirmed its full-year 2026 outlook. The company expects revenue between $2.30 billion and $2.42 billion and adjusted EPS in the range of $0.70 to $0.80.
Clarivate Plc (NYSE:CLVT) is a London-based provider of information services. Founded in 1864, the company operates through Academia & Government, Intellectual Property, and Life Sciences & Healthcare segments.
2. Coty Inc. (NYSE:COTY)
Forward P/E Ratio: 8.85
Number of Hedge Fund Holders: 32
Coty Inc. (NYSE:COTY) is one of the Best Undervalued Stocks to Buy Under $5. Coty Inc. (NYSE:COTY) has fallen more than 20% since the release of its fiscal Q3 2026 earnings on May 6. However, the stock rebounded slightly on May 20 after the company announced Marc Jacobs Beauty’s relaunch and reinstated annual profit targets.
Coty Inc. (NYSE:COTY) trades at around a forward price to earnings ratio of 8.8, which is below the sector average of 15.18. During the fiscal third quarter, the company reported revenue of $1.28 billion, which, despite falling 1% on a reported basis, still exceeded the expectations of $1.27 billion.
Management noted the revenue was disrupted by headwinds related to the conflict in the Middle East. The fiscal Q4 like-for-like revenue is expected to decline by mid single digits as the company is moving towards the “Coty Curated” framework. According to this new policy, Coty will focus on fewer, yet high-impact product launches and AI-driven efficiencies.
Coty Inc. (NYSE:COTY) is a producer, distributor, and marketer of beauty products around the world. It operates through various retail and online channels, and offers different products, including color cosmetics, fragrances, skin care products, and more. It covers a long list of brands such as Gucci, Orveda, Vera Wang, Tiffany & Co., and more.
1. Newell Brands Inc. (NASDAQ:NWL)
Forward P/E Ratio: 7.66
Number of Hedge Fund Holders: 35
Newell Brands Inc. (NASDAQ:NWL) is one of the Best Undervalued Stocks to Buy Under $5. The stock trades at a forward price to earnings ratio of around 7.6, considerably below the sector average of 15.97. Newell Brands Inc. (NASDAQ:NWL) has gained more than 30% over the last 30 days. The gains are driven by the company’s announcement of €40 Million planned investment in French operations and the momentum carried forward from fiscal Q1 2026 earnings reported on May 1.
On June 2, the company announced a €40 million investment in its French operations over the next three years. This is important for the company as France is a significant market for Newell. It ranks among the company’s top ten international markets. The company has operated in France for over 100 years and employs nearly 1,000 people. Moreover, international sales represent 39% of Newell’s total revenue. Management noted that the €40 million will be spent across four key areas, including advanced manufacturing automation, digitization using AI, sustainability and infrastructure upgrades, and workforce development.
That said, during fiscal Q1 2026, Newell Brands Inc. (NASDAQ:NWL) reported revenue of $1.55 billion, which topped expectations of $1.51 billion. The growth was driven by the Learning & Development segment, which grew 3.8% to $594 million. Management has raised its full-year 2026 outlook, now projecting normalized EPS between $0.56 and $0.60 and net sales growth ranging from flat to 2%.
Newell Brands Inc. (NASDAQ:NWL) is an American consumer goods company with a strong portfolio of brands such as Rubbermaid, Sharpie, Graco, Coleman, Rubbermaid Commercial Products, Yankee Candle, Paper Mate, FoodSaver, Dymo, EXPO, Elmer’s, Oster, NUK, Spontex, and Campingaz.
While we acknowledge the potential of NWL 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 NWL and that has 100x upside potential, check out our report about the cheapest AI stock.
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