With significant upside potential, Daqo New Energy Corp. (NYSE:DQ) secures a spot on our list of the 10 Best Debt Free Small Cap Stocks to Buy Now. Daqo New Energy Corp. (DQ) to Pay Roughly $453,000 in Compensation and Attorneys’ Fees Under a Retrial Verdict On September 11, 2025, under a retrial verdict, Daqo New Energy Corp. (NYSE:DQ)’s subsidiary Xinjiang Daqo was ordered to pay roughly $453,000 in compensation and attorneys’ fees to two companies that had provided silicon core processing services. F ...

Core Insights - The article discusses the advantages of investing in debt-free or low-debt small-cap stocks, especially in the current economic climate where corporate bankruptcies are rising due to high interest rates and inflation pressures [2][4]. Industry Overview - Small-cap companies often face uneven cash flows, making high leverage a potential liability. In contrast, debt-free or low-debt companies can reinvest in operations, pursue acquisitions, or return capital to shareholders, providing a competitive edge during economic downturns [2]. - U.S. corporate bankruptcy filings are projected to reach their highest first-half total since 2010, with 371 filings year-to-date, indicating significant pressure on balance sheets across various sectors [2]. Market Performance - Despite economic challenges, broader equity markets are on an upward trend, with major indices like the S&P 500, Nasdaq, and Dow reaching record highs, driven by significant gains in companies like Nvidia [3]. Investment Strategy - The methodology for selecting the 10 Best Debt Free Small Cap Stocks involved using the Finviz screener to identify stocks with a market capitalization under $2 billion and a favorable enterprise value to market cap ratio. The stocks were ranked based on the number of hedge funds holding stakes as of Q2 2025 [7][8]. Company Highlights - **Anavex Life Sciences Corp. (NASDAQ:AVXL)**: - EV to Market Cap: 0.86 - Number of Hedge Fund Holders: 9 - Recently received a 'Buy' rating with a $42 price target following positive Phase 2b/3 Alzheimer's data, indicating significant upside potential [9][10][11]. - **Daqo New Energy Corp. (NYSE:DQ)**: - EV to Market Cap: 0.08 - Number of Hedge Fund Holders: 10 - Recently faced a court ruling requiring compensation of approximately $453,000, but the overall impact on the company remains uncertain [12][13]. - **MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT)**: - EV to Market Cap: 0.78 - Number of Hedge Fund Holders: 11 - Announced the addition of five new dealerships in Mexico and Germany as part of its international expansion strategy, enhancing its market presence [14][15][16].