Best Stocks Under $5 To Buy This Month

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Most investment professionals tell investors to stay away from stocks under $5. These stocks, commonly called penny stocks, tend to have the highest levels of risk. On the other hand, they also represent compelling opportunities. Believe it or not, small-cap stocks have outperformed their large-cap counterparts throughout history.

The key to investing in smaller companies is doing adequate research and choosing the best stocks under $5. These are the types of stocks that have the potential to experience significant growth.

What Are the Best $5 Stocks To Buy Now?

If you’re looking for the best stocks under $5, you’re in risky territory. The smaller the company, the higher it’s potential to face insolvency, bankruptcy and significant losses. However, there are some gems in the market.

1. Ambev S.A. (NYSE: ABEV)
2. Braemar Hotels & Resorts (NYSE: BHR)
3. Sachem Capital Corp. (NYSE: SACH)
4. Bark, Inc. (NYSE: BARK)
5. MarketWise, Inc. (NASDAQ: MKTW)
6. Genasys Inc. (NASDAQ: GNSS)
7. Tetra Technologies (NYSE: TTI)
8. Kosmos Energy (KOS)

1. Ambev S.A. (NYSE: ABEV): $2.155 Per Share

Ambev Ambev might trade like a penny stock, but it’s hardly a small player. As the South American arm of Anheuser-Busch InBev — the world’s largest brewer — Ambev also holds exclusive rights to distribute Pepsi products in Brazil.

The company has posted three consecutive years of revenue and profit growth, though gains slowed in 2023. Free cash flow jumped from $13.1 billion in 2022 to $18.7 billion in 2023, and shareholders enjoy a 6.4% dividend yield. The stock trades at roughly 14 times earnings, suggesting it may be undervalued amid Brazil’s recent economic headwinds.

• Performance metrics: Ambev shares are down about 7% year-to-date (YTD), reflecting broader weakness in emerging markets.
• Market cap: Roughly $35 billion, underscoring its scale and stability. Analysts rate ABEV a “hold,” with a 2.33/5 consensus score — on par with other consumer staples and the S&P 500 average.

2. Braemar Hotels & Resorts (NYSE: BHR): $2.605 Per Share

Braemar Hotels & Resorts is a real estate investment trust specializing in luxury hotels and resorts, operating more than 4,000 rooms under the Hilton, Marriott, and Ritz-Carlton brands across seven U.S. states.

CEO Richard J. Stockton noted that 2022’s record highs were unsustainable after post-pandemic travel rebounded, but resort performance remains well above pre-pandemic levels. The company continues to focus on operational efficiency and long-term positioning.

• Performance metrics: BHR is down roughly 15% YTD as travel stocks face a normalization phase.
• Market cap: Around $250 million, reflecting its niche within the luxury-hospitality segment. Analysts maintain a “hold” rating (2.0/5), about half a point lower than averages for the finance sector and the S&P 500.

3. Sachem Capital Corp. (NYSE: SACH): $1.14 Per Share

Connecticut-based Sachem Capital Corp. is another REIT, originating and servicing first-lien loans for projects such as new construction, fix-and-flip, and refinancing.

The company’s 32-cent annual dividend translates to a robust 13.2% yield, one of the highest in its sector. Analysts project 44% upside over the next 12 months, suggesting significant growth potential.

• Performance metrics: Shares have gained 5% YTD amid renewed investor interest in high-yield REITs.
• Market cap: Roughly $160 million, positioning it as a small-cap income play. MarketBeat rates SACH a “buy” (3.0/5) — ahead of both the finance category (2.47) and the S&P 500 (2.50).

4. Bark, Inc. (NYSE: BARK): $0.8326 Per Share

Best known for its monthly BarkBox subscription, Bark, Inc. has evolved into a broader pet-supply brand. After booming during the pandemic, sales slumped as retail reopened and investor enthusiasm for SPAC-listed companies faded.

Following restructuring and new product launches, Bark appears poised for a turnaround. Analysts see about 38% upside, with a $2.27 price target.

• Performance metrics: Shares are up roughly 10% YTD after a strong Q2 showing.
• Market cap: About $270 million, keeping it in the small-cap growth space. Current analyst sentiment is mixed but improving: one “hold,” one “buy,” and two “strong buys.”

5. MarketWise, Inc. (NASDAQ: MKTW): $14.84 Per Share

MarketWise runs a subscription-based fintech platform offering investment research and education for self-directed investors. After a pandemic-era boom, the company struggled to retain subscribers, leading to steep share declines in 2023.

Founder and CEO T.F. Porter Stansberry has since launched a strategic review to rebuild the subscriber base and improve operations.

• Performance metrics: Shares are down about 12% YTD but have rebounded 20% in the last quarter.
• Market cap: Around $180 million. Analysts rate it a “moderate buy”, forecasting a potential 297% upside to $2.50 per share within a year.

6. Genasys Inc. (NASDAQ: GNSS): $2.20 Per Share

Genasys provides an Internet-of-Things (IoT) communications platform for emergency alerts, mass notifications, and evacuation management — a growing niche in public-safety tech.

Although 2023 brought a temporary revenue dip after six years of growth, CEO Richard S. Danforth said the company is “finally turning the corner.”

• Performance metrics: GNSS is up about 6% YTD following a strong earnings call.
• Market cap: Approximately $140 million. The stock carries a solid “buy” rating with a $5.08 price target, implying roughly 36% upside.

7. Tetra Technologies (NYSE: TTI): $5.68 Per Share

Tetra Technologies leverages its expertise in aqueous chemistry and mineral extraction to expand into low-carbon energy and battery materials — positioning itself at the intersection of traditional energy and clean tech.

Its Q2 2024 earnings showed record revenue of $1.25 billion and profit of $1.05 billion, prompting the company to raise full-year projections.

• Performance metrics: Shares have soared 42% YTD, driven by strong demand for energy-transition materials.
• Market cap: Around $490 million. Of 14 analysts tracked by Yahoo Finance, 11 rate the stock a “buy” or “strong buy,” with a $7.42 price target — nearly double current levels.

8. Kosmos Energy (NYSE: KOS): $1.685 Per Share

Kosmos Energy, a deep-water exploration and production firm, is ramping up operations in Ghana, the Gulf of Mexico, Mauritania, and Senegal. The company aims to boost production by 50% and has already reached the halfway point.

It has beaten earnings expectations for four consecutive quarters and posted 7% year-over-year production growth in Q2 2024.

• Performance metrics: Shares have climbed 12% YTD on strong output and oil-price tailwinds.
• Market cap: Roughly $1.9 billion, making it a mid-cap energy contender. Analysts remain bullish, with 11 of 15 rating KOS a “buy” or “strong buy.” The consensus price target of $7.28 implies 63% upside.

Key Growth Catalysts Driving These Stocks

Each of these low-priced stocks has unique factors that could fuel future growth.

• Ambev S.A. (ABEV). Growing beverage demand across Latin America and exclusive Pepsi distribution rights in Brazil support Ambev’s steady cash-flow growth.
• Braemar Hotels & Resorts (BHR). Rising travel and corporate event demand are helping Braemar’s luxury hotel portfolio regain strength post-pandemic.
• Sachem Capital Corp. (SACH). A strong housing market and high-yield dividend continue to attract investors to Sachem’s short-term real estate lending business.
• Bark, Inc. (BARK). Bark’s business overhaul and expansion into new pet products aim to revive sales and boost customer loyalty.
• MarketWise, Inc. (MKTW). Leadership changes and renewed focus on subscriber retention could drive growth as retail investors return to financial education platforms.
• Genasys Inc. (GNSS). Rising investment in emergency communications positions Genasys for steady growth in public-safety technology.
• Tetra Technologies (TTI). Expansion into low-carbon energy and battery-materials markets provides a major tailwind as EV demand accelerates.
• Kosmos Energy (KOS). Strong production growth in Ghana, Mauritania, and the Gulf of Mexico supports continued earnings momentum.

These growth triggers can turn today’s small-cap bargains into tomorrow’s breakout performers.

Tips for Selecting Penny Stocks

Stock investing is inherently risky, and penny stocks are some of the riskiest of all. However, you can reduce the risk of losing some or all of your investment by researching stocks before you buy.

Here’s what to look for:

• Listed on major exchanges. Focus on stocks traded on established exchanges like the Nasdaq or New York Stock Exchange (NYSE) instead of over-the-counter markets. Exchange-listed companies must meet higher reporting and financial standards, helping reduce risk.
• Undervalued opportunities. Look for undervalued stocks by comparing their price-to-earnings (P/E) ratios to those of similar companies. A lower P/E may signal a bargain, but always weigh it against earnings quality and growth potential.
• Competitive advantage (economic moat). Favor companies with a strong economic moat — a lasting edge that protects them from competitors. For example, Alphabet used its dominance in internet search to expand into advertising and cloud services, creating a lead few can match.
• Strong liquidity. Choose stocks with high trading volume to ensure you can buy or sell easily. Low-liquidity stocks can be harder to exit and may expose you to sharper price swings.
• Share price stability. Avoid companies with prolonged share prices below $1, as major exchanges can delist them if they remain under that threshold for too long.

If you’re unsure you’re ready to invest real money into penny stocks, consider opening a practice account. Several brokerages, including Webull and Schwab, offer simulators you can use to test and hone your stock-picking skills.

Sector-Specific Insights

In addition to assessing individual company fundamentals, it’s critical to view each stock through the lens of sector trends and tailwinds. Below are a few high-potential trends that may reshape performance across different industries — and how they might affect the stocks studied here:

How This Ties Into Your $5 Picks

By anchoring your investment theses around both company-level metrics and structural trends, you get a more resilient view of opportunity. For example, even if a REIT looks cheap on paper, if hospitality demand weakens, its performance might lag anyway. Conversely, a small-cap fintech might overcome short-term weakness if the entire sector surges.

Historical and Sentiment Trends to Watch When Buying a Stock

Understanding a company’s past and how investors feel about its future can reveal whether a low share price represents opportunity or ongoing risk.

• Historical Performance. Some stocks, such as AMC or Grab, have fallen dramatically from their pandemic highs — yet still retain loyal investors hoping for a turnaround.
• Analyst Expectations. Stocks like Sachem Capital and Genasys carry positive analyst ratings and strong upside targets, signaling renewed confidence.
• Upcoming Catalysts. Earnings announcements and operational updates — especially from smaller companies — often spark sharp price swings that can surprise the market.

Global Market Insights: How Geography Shapes Opportunity

Where a company operates can influence everything from profit potential to risk exposure. Many of the best stocks under $5 have international footprints that shape their long-term outlook.

• Latin America. Ambev’s dominance in Brazil and South America links its success to consumer spending and currency trends in emerging markets.
• United States. MarketWise and Braemar Hotels rely heavily on U.S. economic strength and consumer confidence, making them sensitive to domestic interest rate changes.
• Africa and the Gulf of Mexico. Kosmos Energy’s offshore oil and gas projects across Ghana, Mauritania, and the Gulf of Mexico give it geographic diversification — and exposure to high-growth regions.
• Asia. Companies expanding into Asian markets, such as those tied to battery materials or energy storage, could benefit from regional demand for clean-energy infrastructure.

By understanding where each company earns and invests, investors can better gauge how local economies and currencies may affect performance.

Future Trends Shaping Stocks Under $5

Emerging technologies and global shifts are opening new paths for low-priced stocks. Here are a few trends to watch:

• Artificial Intelligence (AI). AI is reshaping industries from finance to manufacturing. Smaller tech firms building automation, analytics, or cybersecurity tools could benefit as adoption expands.
• Clean Energy. The transition to renewable power and electric vehicles boosts demand for lithium, cobalt, and energy storage — creating opportunities for small energy players like Tetra Technologies.
• Biotechnology. Advances in gene editing and personalized medicine keep biotech one of the most volatile yet rewarding spaces for penny stock investors.

Innovation often starts small. These emerging sectors could turn today’s low-cost stocks into tomorrow’s market leaders.

Comparing the Best Stocks Under $5

While all of these sub-$5 stocks offer unique opportunities, a few stand out for their balance of value and growth potential. Tetra Technologies (TTI) leads the pack with strong performance and exposure to the fast-growing clean-energy sector, while Sachem Capital (SACH) appeals to income investors with its double-digit dividend yield. Ambev (ABEV) provides stability and consistent cash flow from a globally recognized brand, making it a solid choice for cautious investors.

Ultimately, the best pick depends on your strategy — whether it’s chasing growth, collecting dividends, or diversifying with small-cap opportunities.

Daria Uhlig contributed to the reporting for this article.

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