On February 2, Francis Gannon, co-CIO of Royce Investment Partners, joined CNBC’s “Power Lunch” to talk about the long-awaited upswing in small-cap stocks. He noted that small caps have outperformed large-cap stocks since the market hit its lows in April 2025.During the discussion, it was noted that sectors such as Industrials, Information Technology, and Financials still offer many attractive small-cap opportunities.Gannon said that small-cap companies have a strong earnings outlook in 2026. He believes th ...

Core Viewpoint - The article discusses the current state of equity markets, highlighting a "manic market" and the potential for investment in strong buy penny stocks, particularly in light of recent economic indicators and hedge fund interest [1][2][3]. Market Analysis - Chris Senyek from Wolfe Research describes the current equity market as "manic," indicating that recent price movements lack fundamental support [1]. - The earnings season has shown positive EPS revisions primarily in sectors such as energy, communication services, technology, and financials, while materials, industrials, and staples are also performing well [2]. - Tim Urbanowicz from Innovator Capital Management notes that while some market segments are expensive, the overall economic backdrop is strong, supported by recent Federal Reserve rate cuts, increased tax refunds for Americans, and rising PMIs, which could lead to a rotation trade [3]. Investment Strategy - The article outlines a methodology for selecting penny stocks, focusing on those priced under $5 with a consensus Strong Buy rating from analysts, and popularity among elite hedge funds as of Q3 2025 [6][7]. - The strategy has historically outperformed the market, with a reported return of 427.7% since May 2014, significantly beating its benchmark [7]. Company Highlights - **VinFast Auto Ltd (NASDAQ:VFS)**: Recently signed a Memorandum of Understanding with Exposure SARL for the supply of electric vehicles for green taxi services in Kinshasa, marking a significant step in its international expansion strategy [9][10][11]. The MOU aims to develop a plan for supplying electric vehicles, including Limo Green and Herio Green models, to operate electric taxi services [10]. - **New Pacific Metals Corp. (NYSE:NEWP)**: Reported a net loss of $1.58 million for the three months ended December 31, 2025, and $2.33 million for the six months, with working capital of $41 million [13][14]. The company’s financial results were influenced by operating expenses and income from investments, which reached $0.31 million and $0.42 million for the respective periods [15]. The company focuses on the development and exploration of mineral properties in Bolivia [15].

Market Overview - The S&P 500 is trading slightly below its all-time highs, showing resilience despite recent selling in sectors like software and AI, with a focus on projected earnings growth in 2026 and potential rate cuts [1] - Long-term investors are encouraged to continue buying strong stocks, as market fluctuations may not significantly impact overall investment strategies [2] Investment Opportunities - Investors are advised to consider best-in-class, cheap stocks trading under $10, which have strong Zacks Ranks due to improving earnings outlooks [3] - Stocks priced under $10 are generally seen as less risky than penny stocks, which trade for less than $5, but still carry speculative risks [4][6] Stock Screening Criteria - A screening process for identifying the best cheap stocks under $10 includes parameters such as price, volume, Zacks Rank, average broker rating, number of analysts covering the stock, and earnings estimate revisions [8][9] Featured Stock: Itaú Unibanco (ITUB) - Itaú Unibanco (ITUB) is highlighted as a strong investment opportunity, being one of the largest private banks in Brazil, with a full range of financial services [10] - ITUB stock has increased by 75% over the past year, with projected adjusted earnings growth of 18% in FY26 and 10% in the following year, supported by 7% sales growth in both periods [11] - The stock currently holds a Zacks Rank of 2 (Buy) and is part of the Banks – Foreign industry, which ranks in the top 16% of Zacks industries, indicating strong potential for price movement [13]

We’ll start with Acumen Pharmaceuticals, a micro-cap biotech company taking on one of medicine’s biggest challenges – Alzheimer’s disease. Acumen is developing new treatments aimed at slowing the progression of the illness, with a mission the company sums up as helping patients “hold on to their moments.” It’s a goal that puts the company in the middle of a massive and growing market opportunity. According to the Alzheimer’s Association, more than 7 million people in the U.S. are living with Alzheimer’s dis ...

Core Insights - The article discusses overlooked penny stocks as potential investment opportunities, emphasizing that investors often miss compelling options due to the volatility and speculative nature of stocks trading under $5 [1][4]. Market Conditions - Broader market conditions are becoming more supportive of selective risk-taking, with a forecast for 2026 indicating stronger-than-trend growth, accommodative policy, and enhanced productivity [2]. - A client survey revealed that 50% of respondents are bullish, with 48% likely to take risks in U.S. equities and 24% in emerging markets [2]. AI Investment Theme - AI is highlighted as a top equity investment theme, with expectations that the market continues to undervalue the opportunities presented by AI data center buildouts [3]. - The improving macro environment and investor enthusiasm for AI-driven productivity are creating favorable conditions for overlooked stocks [3]. Methodology for Stock Selection - The selection process involved filtering companies with a market capitalization over $2 billion and a trading price under $5, focusing on those with the fewest hedge fund holdings to identify overlooked stocks [6]. - Stocks were then ranked based on their potential upside [6]. Company Insights: Ardagh Metal Packaging S.A. (NYSE:AMBP) - Ardagh Metal Packaging has an upside potential of 0.23% as of January 21, 2026, with 30 hedge fund holders [8]. - UBS raised its price target for the company to $4.25, while Morgan Stanley increased it to $4.30, indicating a positive outlook on global beverage demand growth of 2.3% in 2026 [9]. - Truist also raised its price target to $5, noting favorable conditions for beverage cans in North America and Europe [10]. - The company operates in the metal beverage can sector, primarily serving beverage producers [11]. Company Insights: Plug Power Inc. (NASDAQ:PLUG) - Plug Power has an upside potential of 1.35% as of January 21, 2026, with 27 hedge fund holders [12]. - TD Securities lowered its price target to $2 and downgraded the stock from Buy to Hold, citing uncertainty around demand and execution risks [12]. - Analyst sentiment is mixed, with 28% of analysts rating it as a Buy and a wide range in consensus price targets, indicating a cautious outlook [14]. - The company specializes in hydrogen fuel cell product solutions [15].

Core Insights - Penny stocks attract speculative investors seeking high-risk/high-reward opportunities, often focusing on companies with disruptive technologies or compelling turnaround stories [3] - MarketBeat provides a tool listing the 100 Most Popular Penny Stocks based on subscriber interest, which may enhance investor confidence despite not guaranteeing success [4] Company Insights - Vaxart Inc. (NASDAQ: VXRT) is a clinical-stage biotechnology company developing oral vaccines for infectious diseases, aiming to simplify distribution and improve global accessibility [5] - The bull case for Vaxart hinges on its innovative oral vaccine platform, which could significantly impact global immunization efforts if FDA approval is obtained and successful scaling occurs [5] - Clinical risk is a major challenge for Vaxart, as it has not yet brought a product to market, and the vaccine development process is costly and unpredictable [6] Industry Insights - The biotechnology sector is characterized by high volatility and significant competition, particularly from established players with larger R&D budgets [6] - Other companies in the speculative investment space include Microvision, which develops lidar technology for autonomous vehicles, and Datavault AI, which focuses on monetizing digital data through AI and blockchain tools [7]

Core Insights - The stock market is nearing all-time highs as JPMorgan and major banks begin the fourth quarter earnings season, with expectations for a strong year in 2026 driven by earnings growth and potential interest rate cuts from the Fed [1] Group 1: Market Overview - Wall Street anticipates a bullish environment for stocks in 2026, encouraging investors to seek strong stocks, particularly those priced under $10 [2] - The SEC has redefined penny stocks to include those trading below $5, which are often viewed as speculative and carry higher risks [3][4] Group 2: Investment Opportunities - Stocks priced between $5 and $10 are generally considered less risky than penny stocks, making them more appealing to investors [5] - A selective approach can yield winning stocks under $10, with specific screening parameters to identify potential investments [6][8] Group 3: Company Spotlight - Gold Royalty (GROY) - Gold Royalty (GROY) is highlighted as a promising investment, focusing on gold-centric royalty financing solutions, with a strong earnings outlook for 2026 [9][10] - GROY is projected to grow its revenue by 66% in FY25 and 133% in FY26, reaching $39 million, while also expected to turn a profit of $0.06 per share in 2026 [11] - The company benefits from a structural bull run in gold prices, driven by global demand, geopolitical risks, and inflation, with GROY shares having increased by 285% over the past year [13]

Group 1 - The S&P 500 has gained 35% since its lows in April, indicating optimism for continued market rally into 2026 [1] - Executives are cautioning about a potential equity market drop of more than 10% in the next 12 to 24 months, which is described as normal market behavior [2] Group 2 - Royalty Management Holding Corp. (RMCO) moved up 51 spots to 30th place on Barchart's top 100 stocks to buy list [3] - Estrella Immunopharma (ESLA) also rose 51 spots to 18th place, both being penny stocks trading below $5 [3] Group 3 - Royalty Management went public on November 6, 2023, through a combination with American Acquisition Opportunity Inc., a SPAC that raised $100 million in March 2021 [4] - The SPAC focused its search on companies with land and resource holdings, with its management team linked to American Resources Corporation (AREC) [5] Group 4 - AREC stock has increased by 953% from its low of 38 cents in April, attracting investors to Royalty Management and RMCO stock [6] - The SPAC extended its timeline to effect a combination from March 2022 to September 2022, announcing the combination with Royalty Management on June 28, 2022 [6]

Group 1: Penny Stocks Overview - Five penny stocks to watch include Beyond Meat, Strive, VSee Health, Pulmonx, and Datavault AI, identified by MarketBeat's stock screener tool [2] - Penny stocks are defined as shares of very small or microcap companies trading at low per-share prices, traditionally under $1 but commonly under $5 in the U.S. [2] - These stocks often trade on over-the-counter markets, characterized by low liquidity, wide bid-ask spreads, high volatility, and a greater risk of price manipulation and loss [2] Group 2: Company Profiles - Beyond Meat, Inc. develops, manufactures, markets, and sells plant-based meat products across various platforms including beef, pork, and poultry, with distribution through grocery and foodservice channels [3] - Strive (Asset Entities Inc.) provides social media marketing and content delivery services, focusing on platforms like Discord and TikTok, and offers investment education and marketing services [4] - Pulmonx Corporation specializes in minimally invasive devices for chronic obstructive pulmonary diseases, offering products like the Zephyr Endobronchial Valve and Chartis Pulmonary Assessment System [5] - Datavault AI Inc. operates data management and supercomputer platforms, providing data technology and software solutions, previously known as WiSA Technologies, Inc. [6]

Core Viewpoint - Beyond Meat (BYND) is facing significant risks, with a senior analyst from TD Cowen predicting a potential crash of up to 80% from its current price, lowering the price target from $2 to $0.80 [1][3]. Financial Performance - Beyond Meat continues to report losses, with negative margins and no clear timeline for achieving profitability, indicating that the recent stock rally is more driven by hype than solid financial fundamentals [4]. Market Sentiment - Retail traders have begun selling BYND stock, with shares down over 50% from their intraday high during the latest trading session [2]. - The consensus rating for BYND shares is currently "Moderate Sell," with a mean target of $2.33, suggesting a significant decline is anticipated [8]. Risks and Volatility - Beyond Meat is categorized as both a meme stock and a penny stock, which are known for extreme volatility and speculative trading, making it a risky investment [5]. - The recent convertible notes offering has diluted shares significantly, increasing the overall share count while reducing debt by 83%, which is viewed as a major red flag by analysts [3]. Analyst Recommendations - Other Wall Street analysts are also advising caution regarding Beyond Meat stock, aligning with the bearish outlook presented by Robert Moskow [7].