10 Deep Value Stocks to Buy Now

1. Civitas Resources Inc. (NYSE:CIVI)

Fwd. P/E: 3.9

Dividend Yield: 12.5%

Number of Hedge Fund Holders: 47

Civitas Resources Inc. (NYSE:CIVI) is an independent oil and gas exploration and production company with operations concentrated in Colorado’s DJ Basin and the Permian Basin across Texas and New Mexico.

2024 has been brutal for Civitas Resources Inc. (NYSE:CIVI) shareholders, with the stock losing over 50% of its value since the start of the year. As of March 10, shares trade near a 52-week low of $31.70, levels not seen since mid-2021. Investor sentiment has been weighed down by underwhelming financial performance, a trend that persisted in Q4 2024. While revenue met expectations, higher-than-anticipated operating costs—stemming from winterization efforts, maintenance, and workover activities—dented earnings, leading to a lower-than-expected EPS. In response, the company trimmed its 2025 capital expenditure (capex) by 5% compared to 2024.

Adding to the pressure, KeyBanc downgraded the stock from Overweight to Sector Weight, citing weak 2025 guidance and heightened uncertainty. The lack of management commentary on a possible Denver-Julesburg Basin divestiture has raised investor concerns, while the sudden departure of the chief operating officer after just 22 months has fueled speculation beyond simple cost-cutting. Moreover, Civitas’ 2025 forecast projects a 4% decline in oil production, which could weigh on the stock further.

Despite these headwinds, Civitas Resources Inc. (NYSE:CIVI) still has significant cash flow potential. The company is targeting an adjusted free cash flow (AFCF) of $1.1 billion in 2025, with an AFCF yield of 22%, assuming oil prices stay around $70 per barrel. Backed by a high-quality asset base and low-breakeven inventory, Civitas has historically been a strong cash generator. In 2023 and 2024, the company delivered $796 million and $1.3 billion in AFCF, respectively, returning 92% of those cash flows to shareholders through dividends and stock buybacks.

While we acknowledge the potential of CIVI to grow, 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 CIVI 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 Buy Now According to Billionaires.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.