10 Best Debt-Free Penny Stocks to Buy Right Now

Core Insights - The article discusses the potential of small-cap stocks, particularly debt-free penny stocks, as investment opportunities in 2026, driven by a rotation from large-cap stocks and a favorable macroeconomic outlook [1][4][5]. Small-Cap Market Trends - Small-cap companies have shown strong performance, with the Russell 2000 index rising 13% in 2025, indicating a shift in investor focus from large-cap stocks to small-cap stocks with lower valuations [1][2]. - Francis Gannon from Royce Investment Partners anticipates that small-cap earnings, which have been stagnant, are beginning to recover, contributing to continued outperformance against larger indices [3]. Economic Outlook - Goldman Sachs' portfolio strategy team predicts that small-cap stocks will benefit from an improving U.S. economic growth outlook, below-consensus inflation, and ongoing Federal Reserve easing [4][5]. - The Russell 2000 index reaching a new record high suggests a significant breakout in small-cap stocks as investors move capital away from overextended technology giants [6]. Methodology for Stock Selection - The article outlines a methodology for identifying the best debt-free penny stocks, focusing on U.S. stocks with a market capitalization of at least $1 billion and trading below $5 per share, with an enterprise value to market cap ratio of 1.0 or below [8]. - The selection process also considers stocks with a potential upside of at least 20% and high hedge fund ownership, leveraging data from hedge fund databases [9][10]. Featured Debt-Free Penny Stocks - Evotec SE (NASDAQ:EVO): Expected stock upside potential of 65.29%, with recent grants from the Gates Foundation aimed at improving access to biotherapeutics and potential benefits from Amgen's acquisition of Dark Blue Therapeutics [11][12][13][14]. - Integra Resources Corp. (NYSE:ITRG): Anticipated stock upside potential of 32.20%, having eliminated corporate-level debt through the conversion and repayment of a convertible debenture facility, strengthening its financial position for the DeLamar project [15][16][17][18][19].