We recently published a list of 10 Ridiculously Cheap Stocks to Buy Right Now. In this article, we are going to take a look at where Devon Energy Corporation (NYSE:DVN) stands against other ridiculously cheap stocks to buy right now.
The Market is Not Cheap Right Now, Strategist Says
The S&P 500 is currently trading at 23 times its forward earnings, indicative that the market is really expensive at the moment. On November 14, Alan McKnight, CIO at Regions Wealth Management, joined CNBC to share his stance on the market and his expectations moving forward.
McKnight agrees that the market is not cheap at the moment, however, this does not mean that investors halt buying. In fact, investors should continue to invest but be wary about volatility. He adds that opportunities are coming up as we head into 2025. McKnight shares that with the expectations from the economy, investors must consider broadening their portfolios. He also remains positive on small and mid-cap stocks.
READ ALSO: 10 AI News Updates You Can’t Miss This Weekend and 14 AI Stocks on Wall Street’s Radar.
The Tariff Debate and Its Impact on Investment Strategy
Presidential elections have adjourned, and with that, new questions on the investment outlook have emerged. Investors are curious to see how the proposed tariffs on Chinese goods and all other imports impact the way markets behave moving forward. On November 22, Jeffrey Kleintop, chief global investment strategist at Charles Schwab, joined Rachelle Akuffo on Yahoo Finance to share his expectations of the market and the investment outlook for the new presidential term.
Kleintop shares that the combined tariff claims by the newly elected government would bring the weighted average US tariff to 26%, significantly higher than its current state. He adds that while there is “reason for concern” investors do not need to make significant changes to their portfolios. He also states that currencies adjust with tariffs all the time, and since the dollar is already up by 5%, much of the impact has been mitigated.
Adding to the notion of risk mitigation, Kleintop suggests that diversification, away from popular themes in the United States, is crucial at the moment. Currently, tech and artificial intelligence hold dominance in the market, and investors must consider spreading to other avenues. He also shares that anywhere outside the United States, financials are performing extremely well and expects international stocks to grow moving forward. He adds that Europe is a bright spot where we might see an acceleration in earnings growth and price-to-earnings ratios.
He also acknowledges that AI has the potential to improve productivity, especially in areas that have been “lagging,” and shares he is interested to see how the AI market turns out. While most strategists and analysts are bullish on AI, stocks in this sector are particularly expensive relative to value stocks. That said, let’s take a look at the 10 ridiculously cheap stocks to buy right now.
Our Methodology
To come up with the 10 ridiculously cheap stocks to buy right now, we used the Finviz Stock Screener. We set the forward P/E to 8 and under and market capitalization to $2 billion and above. We then shortlisted the top 30 names and sourced their forward P/E from Seeking Alpha and market capitalization from Yahoo Finance. We then ranked them in ascending order of the analyst upside as of November 25, 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A group of technicians in hazmat suits inspecting a natural gas storage tank.
Devon Energy Corporation (NYSE:DVN)
Analyst Upside as of November 25, 2024: 27%
Forward P/E as of November 25, 2024: 8.26
Market Capitalization as of November 25, 2024: $25.9 Billion
Devon Energy Corporation (NYSE:DVN) is an oil and gas exploration and production company that ranks seventh on our list of ridiculously cheap stocks to buy right now. The company’s operations are focused onshore in the United States.
In the third quarter of 2024, Devon Energy Corporation (NYSE:DVN) had stupendous daily production levels, at 335,000 barrels of oil, 194,000 barrels of natural gas, and close to 1.2 billion cubic feet of natural gas. The company boasts a solid liquidity situation. As of Q3 2024, the company has $3.7 billion in total liquidity and a cash balance of $0.7 billion with retired debt worth $0.5 billion.
For the fiscal year 2025, the company expects to reinvest 65% of its cash flow into the company and have total capital worth $4 to $4.2 billion. The company also expects production volumes to reach 800 mboed (Thousand barrels of oil equivalent per day), indicative of its position as a leader in the industry. Devon Energy Corporation (NYSE:DVN) also has a $2.5 billion debt reduction program underway, of which 70% of outstanding debt obligations are expected to mature after 2030.
For the year ahead in 2025, Devon Energy Corporation (NYSE:DVN) expects to sustain its portfolio, build on its financials, and deliver value to its shareholders. Its expansion strategy and growth trajectory align with its 2025 goals, contributing to its ranking on our list.
Overall, DVN ranks 7th on our list of ridiculously cheap stocks to buy right now. While we acknowledge the potential of DVN to grow, our conviction lies in the belief that certain 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 DVN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.