We recently published a list of the 10 Most Undervalued Penny Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Commscope Holding Company, Inc. (NASDAQ:COMM) stands against other undervalued penny stocks.

Earlier on March 18, Keith Fitz-Gerald, Fitz-Gerald Group CIO, joined ‘Power Lunch’ on CNBC to talk about how to make sense of the market and the recession versus the growth scare. Keith Fitzgerald has favored some big momentum names in recent years and is still very positive on these stocks, despite feeling frustrated by recent market action. He thinks this volatility partially comes from computers, algorithms, and equity beta. He advised the average investor to focus on fundamentals and pay attention to the insights of leaders like Jensen Huang as a way to move forward. Fitzgerald also revealed that he had been adding to all of his positions over the then-past week and planned to continue doing so, instead of joining the selloff stride. He explained that he invests with a 3, 4, or even 10-year horizon and believes that these companies are dramatically undervalued at present, even if that view is unpopular.

As the conversation turned to how Fitzgerald distinguishes between stocks that have further downside and those that are poised for a turnaround, he suggested slowing down buying rather than trying to perfectly time the bottom. Fitzgerald emphasized that he is more concerned with finding a good entry point than catching the absolute lowest price. He views deeper selloffs as more attractive opportunities, and recognizes that technical factors driven by algorithms are pushing prices. Fitzgerald agreed that the persisting sources of uncertainty remain, such as the ongoing confusion around Trump’s tariff policies and uncertainty in the AI sector. He noted that traders dislike uncertainty above all else because it prevents decisive actions.

However, Fitzgerald remains focused on long-term trends and themes, such as AI, automation, and full-service business models. As he evaluates opportunities, he looks for where this investment will flow, which companies are most likely to benefit, and whose customers are most engaged. For Fitzgerald, the focus remains on companies with high-quality leadership, strong products, and loyal customers.

Our Methodology

We used the Finviz stock screener to compile a list of cheap penny stocks that were trading under $5 and had a forward P/E ratio under 15. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 1000 elite money managers.

Note: All data was sourced on April 18.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Aerial shot of a communications tower, emphasizing the company's infrastructure networks.

Commscope Holding Company, Inc. (NASDAQ:COMM)

Share Price as of April 18: $3.33

Forward P/E ratio as of April 18: 3.72

Number of Hedge Fund Holders: 32

Commscope Holding Company, Inc. (NASDAQ:COMM) provides infrastructure solutions for communications, data centers, and entertainment networks. It operates in three segments: Connectivity & Cable Solutions, Networking, Intelligent Cellular & Security Solutions, and Access Network Solutions.

In 2024, Commscope’s Connectivity and Cable Solutions segment improved its full-year revenue by 4.5% year-over-year, which was driven by the expanding data center market. The enterprise fiber business particularly generated $623 million in revenue because of its focus on data center products, and represented 22% of CCS revenue. This was a 73% year-over-year increase. In Q4 alone, the CCS revenue was up 36%, while the enterprise fiber business was up 96%.

Commscope Holding Company, Inc. (NASDAQ:COMM) is expanding its production capacity to meet the demand from the data center market, which is projected to grow by over 30% annually. The company is in the middle of a capacity expansion that is expected to add $300 million to its revenue. Commscope also improved its financial position by completing a debt refinancing and selling its OWN and DAS businesses to Amphenol for $2.1 billion, using the proceeds to repay ~$2 billion of debt.

Overall, COMM ranks 4th on our list of the most undervalued penny stocks to buy according to hedge funds. While we acknowledge the growth potential of COMM, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than COMM but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.