JetBlue Airways Corporation (JBLU): Among the Best American Penny Stocks to Buy Now

We recently compiled a list of the 10 Best American Penny Stocks to Buy Now. In this article, we are going to take a look at where JetBlue Airways Corporation (NASDAQ:JBLU) stands against the other American penny stocks.

American penny stocks comprise shares of US-based companies that trade under $5 on public exchanges. Besides their perceived appeal to retail investors due to cheap price and the possibility to affordably amass a large number of shares, American penny stocks are distinct for representing two important factors – the small-cap factor and the US country factor. Readers should know that these two factors are known for significantly outperforming their broad market counterparts in the last 15 years after the Great Financial Crisis. For reference, small-cap factor has outperformed its large-cap counterparts throughout the 2010s as the economy experienced a relatively peaceful period with relatively low interest rates, which is highly favorable for small, high-growth businesses. Likewise, the US stock market has consistently outperformed the World stock market, including major markets like Europe, China, and Japan, thanks to superior productivity growth and valuation expansion.

The situation drastically reversed in late 2024 and early 2025 with the election of a new US administration. The US stock market underperformed by more than 15% markets like Germany and China since the beginning of the year.  The small-cap factor fell out of favor relative to the large-cap factor. The former event was driven by aggressive Trump 2.0 cuts and tariff threats, which put the US export/import base at risk, while the latter is driven by market uncertainty and investors flying to safe assets such as gold, bonds, or mature large-cap stocks. We believe that both these developments are temporary shocks and do not represent structural or definitive changes. In this context, a smart way to make money in the market would be to take a contrarian bet and buy American small-cap and penny stocks while they are relatively underpriced vs. their global and large-cap counterparts.

READ ALSO: 13 Best Canadian Penny Stocks to Invest in Now

First of all, we are firm believers that US investors should “stay at home” and continue to favor domestic stocks. The superior performance of the US stock market was not luck, but rather consistent productivity growth through deregulation, capital favoring risky but promising projects, and a more prominent hustle mentality. The European Central Bank confirms these findings and mentions that between Q4 2019 and Q2 2024, labor productivity per hour worked increased by 0.9% in the Euro area, whereas it increased by 6.7% in the US. This difference is significant and compounds over time, leading to drastic differences in stock price performance over 5-10 years or more. Odds are that the US will continue to outperform Europe and the rest of the world in productivity gains. According to analysts, Trump turmoil is a temporary thing; tariff uncertainty should naturally resolve at some point, through either a trade deal or a withdrawal by the President himself. Furthermore, the Trump 2.0 regime has some aces up its sleeve, such as tax cuts and further deregulation, which is a heaven for productivity growth. Europe, on the other hand, remains a slow bureaucratic machine that is fueling its economic growth through debt issuance and industrial-military projects that bring very little value added (for reference, the German €500 billion spending bill will mostly result in new missiles that will probably never be fired). Likewise, China has its own problems, such as stalled population growth and increasing threats of onshoring and outsourcing to India and other regions. India got itself stuck in a new war with Pakistan, which might negatively impact its investment climate and economic growth.

Second, small caps and penny stocks became cheaper due to recessionary threats and widespread signals that the US economy is slowing down. While many sectors, such as construction and industrial automation, are indeed in a slowdown, the stock market is a forward-looking animal that gauges developments that would impact the economy 6-12 months from now. In other words, the market is very likely to return to growth upon the slightest positive signal. We believe there are many indications that the US will be able to avoid a deep economic recession. Rumors, as well as thorough analysts from leading banks like JP Morgan, say that the tariff saga is approaching a possible end through a deal with China and other large trade partners. China is likely to sit at the negotiating table as its economic outlook has been deteriorating as well – it turns out that around 20 million jobs in the country are directly dependent on commerce with the US. Avoiding a trade deal with the US might be more catastrophic for China than it might be for the US. Also, the latest report shows that the US economy added 177,000 jobs in April, beating expectations by a wide margin, which indicates that CEOs are reluctant to downscale their business and rather anticipate a gradual rejuvenation in the business environment later in the year.

With that being said, contrary to the prevailing belief, our opinion is that the US economy is far from doomed. History shows that stock markets have always recovered and always scored new highs. In this context, the best American penny stocks could become favored again and outperform the broad market.

Our Methodology

To compile our list of the best American penny stocks, we used a screener to identify companies based in the US with a share price below $5.00. Then we compared the list with Insider Monkey's proprietary database of hedge funds’ ownership, as of Q4 2024, and included in the article the top 10 stocks with the largest number of hedge funds that own the stock, ranked in ascending order.

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).

JetBlue Airways Corporation (NASDAQ:JBLU)

Stock price as of May 6^th: $4.40

Number of Hedge Fund Holders: 33

JetBlue Airways Corporation (NASDAQ:JBLU) is a US-based low-cost airline operating over 1,000 daily flights to more than 100 destinations across the United States, Latin America, the Caribbean, Canada, and Europe. The company is headquartered in New York, but maintains major hubs in JFK airport, Boston, Fort Lauderdale, Los Angeles, Orlando, and San Juan.

JetBlue Airways Corporation (NASDAQ:JBLU) faced challenges in Q1 2025 due to weakening demand and an uncertain economic environment, with capacity down 4.3%. The company is taking decisive actions to address these challenges, including reducing capacity, limiting discretionary spending, and reevaluating fleet plans. Despite these headwinds, management remains committed to its long-term JetForward strategy, which aims to drive transformational change and return the airline to sustained profitability.

On the positive side, JetBlue Airways Corporation (NASDAQ:JBLU) is seeing some positive trends, including strong performance in premium segments and international markets, as well as improvements in operational metrics like A14 and Net Promoter Score. The company is also making progress with cost transformation initiatives and expects savings to ramp up in the second half of the year. Additionally, the company is pursuing new opportunities, such as a potential domestic airline partnership and expansion into secondary cities, which could provide future growth avenues. JBLU is down more than 40% since February 2025, under what we believe are temporary capacity headwinds induced by uncertainty and tariffs. JLBU is one of the best American penny stocks to buy now as it is currently trading at only 0.17x Price-to-Sales ratio.

Overall JBLU ranks 7th on our list of the best American penny stocks to buy now. While we acknowledge the potential of JBLU as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher 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 JBLU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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

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