10 Best Depressed Stocks To Buy Heading into 2025

7. Civitas Resources, Inc. (NYSE:CIVI)

52 Week Range: $49.10 – $79.97 

Current Share Price: $50.23

Number of Hedge Fund Holders: 52

Analyst Upside Potential: 61.26%

Civitas Resources, Inc. (NYSE:CIVI) is an independent oil and gas company based in Colorado, primarily focused on producing energy from two major areas including the Denver-Julesburg Basin and the Permian Basin. The company has significant land holdings, with about 453,600 net acres in the DJ Basin and 68,500 net acres in the Permian Basin. Their total production is approximately 280,000 barrels of oil equivalent per day.

The company has undergone significant transformation in the past year, particularly with its entry into the Permian Basin, which has enhanced its operational scale and quality. This strategic move has provided the company with greater flexibility in capital allocation and created a more sustainable business model.

During the second quarter of fiscal 2024, the Permian Basin sales increased by 12% subsequently mainly due to strong production in its Delaware and Midland Basin wells. The overall revenue of Civitas Resources, Inc. (NYSE:CIVI) grew by more than 98% year-over-year, with crude oil making up around 87% of the revenue.

Another key highlight for the quarter came in as lower-than-expected operating expense of $8.97 per barrel of oil. Moreover, the Well costs in the Midland Basin have come down by 10% lower than its initial cost indicating that the company has gained operational efficiency and is generating greater margins per barrel of oil produced.

It is one of the best-depressed stocks to buy heading into 2025 because the stock is currently trading close to its 52-week lows while analysts are expecting its price to shoot up by 61% during the year.

Diamond Hill Mid Cap Strategy stated the following regarding Civitas Resources, Inc. (NYSE:CIVI) in its Q2 2024 investor letter:

“Despite rising valuations, we continue finding attractively valued, quality companies the market is overlooking amid its increasingly narrow focus on the mega-cap technology stocks dominating the major indices. In Q2, we introduced new positions in Sysco Corporation, Civitas Resources, Inc. (NYSE:CIVI), Labcorp Holdings and VeriSign.

Civitas Resources is an oil and natural gas explorer and producer focused primarily on the DJ Basin. It has recently made several acquisitions in the Permian Basin as it attempts to expand and diversify its holdings beyond the DJ Basin — a decision that we appreciate. It has low-cost drilling inventory, and we believe the management team responsibly runs the company. We added it to the portfolio in Q2, as we think its assets and cash-generation potential remain undervalued by the market.”