5 Cheap Penny Stocks to Buy According to Hedge Funds

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In this article, we discuss 5 cheap penny stocks to buy according to hedge funds. If you want to see more stocks in this selection, check out 12 Cheap Penny Stocks to Buy According to Hedge Funds

5. Genworth Financial, Inc. (NYSE:GNW)

Number of Hedge Fund Holders: 23

P/E Ratio as of March 29: 4.17

Genworth Financial, Inc. (NYSE:GNW) provides insurance products in the United States and internationally. The company was founded in 1871 and is headquartered in Richmond, Virginia. One of Genworth Financial, Inc. (NYSE:GNW)’s achievements in 2022 was reaching its long-term debt goal and distributing profits to shareholders for the first time in over 13 years. The adjusted earnings per share for Q4 2022 were $0.33, which exceeded the market consensus of $0.23. Additionally, Genworth Financial, Inc. (NYSE:GNW)’s revenue increased to $1.90 billion in Q4, up from $1.84 billion in the previous quarter. It is one of the best cheap penny stocks to invest in according to hedge funds. 

According to Insider Monkey’s fourth quarter database, 23 hedge funds were bullish on Genworth Financial, Inc. (NYSE:GNW), compared to 25 funds in the last quarter. GLG Partners is the biggest position holder in the company, with 3.5 million shares worth $18.70 million. 

Here is what Ravensource Fund has to say about Genworth Financial, Inc. (NYSE:GNW) in its Q4 2021 investor letter:

“Genworth is a U.S. publicly listed (NYSE:GNW) insurance company that covers mortgage, life and long-term care needs. In 2021, the market price of our Genworth common shares increased from $3.78 to $4.05, growing the value of your Ravensource investment by 0.4%.

Much like Quad, Genworth had a transformative year. And much like Quad essentially none of its achievements were reflected in its share price. In 2021, Genworth sold its stake in its Australian mortgage insurance unit and successfully completed a partial IPO of its crown jewel U.S. mortgage insurer, both key milestones for our thesis. These non-core asset sales enabled Genworth to reduce its debt by ~$1bn / 50% in 2021, with over $3bn of total debt reduction since our initial investment. Genworth has gone from a company whose senior debt was trading at 10% yields, to a strong healthy company intending to return capital to shareholders in 2022 — the first time it will have done so since 2008. This is a critical final-stage step to Genworth rebuilding its market credibility and investor base, and will help bridge the gap between the current price and our conservative value of $5.00, representing a 23.5% potential return.”

Follow Genworth Financial Inc (NYSE:GNW)

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