President Trump’s tariffs on Canada and Mexico went live on March 4, 2025, after a one-month moratorium, prompting retaliatory tariffs from both countries and China. This "game of tariffs" is expected to impact the US economy significantly. Immediately after Trump’s announcement, the S&P 500 fell to a new low (5,732.59) since November last year. Although the index had recouped some losses slightly (to 5,778.15 at the time of writing), the message is clear: Trump has ignited a full-blown trade war, and investors aren’t willing to take any losses.
Legendary investor Warren Buffett commented on this situation, saying the American people will suffer the sharpest pain from the tariffs. “Tariffs are actually, we’ve had a lot of experience with them. They’re an act of war, to some degree. Over time, they are a tax on goods. I mean, the tooth fairy doesn’t pay ’em! And then what? You always have to ask that question in economics. You always say, ‘And then what?’” Buffet told CBS News’ Norah O’Donnell.
However, others see this policy as the Trump administration’s strategy to try to renegotiate some of the trade deals the US has with the countries in question. Spencer Ford, CEO and Wealth Advisor with Conservative Financial Solutions believes that this administration wants to win in the eyes of Americans, and if tariffs are the way, so be it. Although he doesn’t hesitate to suggest a better approach:
“The way they’re gonna do that [score better trade deals] is through a strong economy, and you don’t do that through prolonged tariffs because it just makes things more expensive. They’re [tariffs] inflationary. And as we’ve seen, it’s not really good for the investment markets. I think a lot of people are hoping maybe we’ll see what happened from Friday to today with Ukraine where, Yeah. Suddenly there’s a change of heart there.”
Will Trump change heart? Probably. US Commerce Secretary Howard Lutnick recently announced that President Trump will likely announce a deal to cut tariffs on the neighbors. “Both the Canadians and Mexicans were on the phone with me all day today trying to show that they’ll do better on reducing the flow of the synthetic opioid fentanyl into the US,” he told Fox Business Network.
But whatever happens, the damage has already been done. Looking at the NYSE, most companies listed on the exchange have been doing great since Trump’s comeback at the White House. The NYSE Composite Index has been in the green since January 10, 2025. However, this growth was almost wiped off in a single day when the US tariffs were effected, and the target countries announced retaliations.
On the very day the tariffs were effected, the NYSE shed over 2% in value. This index includes a mix of large-cap, mid-cap, and small-cap shares, but the scales tip towards large-cap stocks. This tells you that when the index posts losses, the sell-off affects large-cap stocks more. Granted, small-caps were also affected but the largest impact went to the huge conglomerates that often operate across borders.
The latest data shows that NYSE stocks are recovering—the NYSE has so far climbed 1.33% (as of the close on March 5). A lot of this activity is investors’ optimism about a tariff reprieve across more sectors after Trump gave the big three automakers a one-month reprieve. But whether this will happen is a question no one can answer right now. That means that the possibility of the NYSE stocks taking another dip in the future is real. And the shares whose value is much more at stake are the large-caps, which makes this an opportune time to consider NYSE penny stocks.
Our Methodology
To assemble these companies, we used stock screeners to identify NYSE stocks trading under $5. We filtered the resulting companies and picked 12 stocks based on upside potential (at least 30% as of March 7). Additionally, we have included the hedge fund sentiment around each stock, as of Q4 2024.
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).
A petrol tanker truck refueling a highway service station, highlighting the fuel distribution arm of the company.
Cosan S.A. (NYSE:CSAN) is a Brazilian conglomerate that operates in multiple sectors, including logistics, fuel distribution, natural gas, and lubricants. The company controls logistics firm Rumo, lubricants company Moove, and natural gas firm Compass and shares control of Raizen with Shell.
In January 2025, Cosan S.A. (NYSE:CSAN) sold approximately 173 million shares of its stake in Vale, cutting the stake by 4.05%. According to reports, the transaction raised around 9 billion reals ($1.5 billion). One of the things the company went to do immediately after the sale was to reduce its debt by 40%. The company stated in a securities filing that the decision was “based solely on the goal of optimizing its capital structure.”
Cosan S.A. (NYSE:CSAN) financial results for Q4 2024 showed mixed performance. The company reported an EBITDA under management of approximately BRL 30 billion ($5.1 billion). However, despite this positive EBITDA, the company recorded a negative earnings result of BRL 900 million ($152.9 million) for 2024. The company cited the depreciation of the home currency (Brazilian Real) and the devaluation of its shares as the primary causes of the poor financial performance. To be sure the company’s financial position isn’t as dire as the Q4 2024 financial results may want to portray, its corporate net debt stood at BRL 23.4 billion ($3.98 billion) by the end of 2024, with a debt service coverage ratio of 1.1.
Another positive is that the company announced a notable increase in dividends and interest on capital received, amounting to BRL 4.3 billion ($731.53 million) in 2024. Additionally, Rumo achieved record levels in transported volumes and tariffs in the fourth quarter. Management has promised to improve Cosan S.A. (NYSE:CSAN)'s capital structure this year. In addition to the Vale divestment, the company plans to pursue similar transactions throughout the year. Analysts project a 146.96% upside potential from the stock’s current price, which secures the company’s spot on this list of NYSE penny stocks to buy.
Overall CSAN ranks 3rd on our list of the best NYSE penny stocks to buy according to analysts. While we acknowledge the potential of CSAN 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. If you are looking for an AI stock that is more promising than CSAN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
