In this article, we will discuss the 12 Best Depressed Stocks to Invest in Now.
The US stocks ended 2024 with a healthy Q4, as the equity markets were primarily aided by solid economic growth, healthy earnings momentum, and the expectations of the rate cuts. Morningstar highlighted that the results of the US election supported the broader momentum in November. However, in December, the markets were shocked when the US Fed reduced projections for more cuts. Also, the quarter was difficult for bonds as yields continued to jump.
With Trump 2.0 and some positive expectations regarding risky assets, what lies ahead for investors in 2025?
What’s in Store for S&P 500 Index in 2025?
Ameriprise Financial believes that the US economic conditions are likely to remain stable, which can contribute to S&P 500 Index profits growing for 5th consecutive year. The normalized inflation, together with potentially lower interest rates, can support asset prices. The investment firm sees a favorable market backdrop in 2025. Notably, firm economic conditions, near-normal inflation, broadening of profit growth, healthy secular themes throughout technology, and growth-focused fiscal policies are expected to fuel the equity markets momentum, albeit with some volatility throughout the year.
Ameriprise Financial expects that S&P 500 profits will grow by between 10.0% – 15.0% as compared to 2024 levels, courtesy of continued strength in the broader technology space and companies/industries getting support from healthy economic activity and easier YoY comparisons. Furthermore, all 11 S&P 500 sectors are expected to see positive EPS growth in 2025. If sectors like IT and communication services see robust earnings trends in 2025 and other sectors also make a positive contribution, the US stocks are poised to see a strong performance in 2025.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Impact of New Presidential Administration on Markets
Certain potential changes to tax policy, regulation, trade policies, and immigration are expected to influence the equity markets in 2025. Ameriprise Financial further added that a lesser amount of regulation and the extension of expiring provisions in the 2017 Tax Cuts and Jobs Act might be slightly stimulative and positive for asset prices. Vanguard believes that growth momentum is expected to remain solid over the near term thanks to productivity gains and less restrictive monetary policy.
Further, the asset management giant expects the core Personal Consumption Expenditures Price Index, the US Fed’s preferred inflation gauge which excludes volatile food and energy prices, to decline to 2.5% by the 2025 end.
Amidst these expectations, we will now have a look at the 12 Best Depressed Stocks to Invest in Now
A magnified view of a global stock index market chart with the fluctuations of stock investment.
Our Methodology
To list the 12 Best Depressed Stocks to Invest in Now, we used a screener to filter out the stocks that are trading close to their respective 52-week lows. Next, we chose the ones that were popular among hedge funds. Finally, the stocks were arranged in ascending order of their hedge fund sentiments, as of Q3 2024.
At Insider Monkey we are obsessed with 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).
12 Best Depressed Stocks to Invest in Now
12) Conagra Brands, Inc. (NYSE:CAG)
52-week Low: $25.05
Price as of 24 January: $25.78
Number of Hedge Fund Holders: 26
Conagra Brands, Inc. (NYSE:CAG) operates as a consumer-packaged goods food company mainly in the US. The company’s stock has been impacted by the pressures witnessed in the consumer goods sector, such as higher input costs and shifts in consumer trends. Furthermore, the company expects its business to be impacted in H2 2025 due to higher than anticipated inflation and unfavorable foreign exchange rates. That being said, Conagra Brands, Inc. (NYSE:CAG)’s strong position in frozen foods and snacks presents significant opportunities for growth. With consumer lifestyles continuing to evolve, a strong demand for convenient, high-quality frozen meals and snacks is expected.
Conagra Brands, Inc. (NYSE:CAG) is expected to capitalize on this trend as it focuses on product innovation, mainly in areas including healthier options, plant-based alternatives, and premium offerings. Its well-established brand portfolio and distribution network offer a strong foundation for introducing new products and capturing emerging market trends. By leveraging scale and marketing capabilities, Conagra Brands, Inc. (NYSE:CAG) is expected to potentially gain market share and fuel volume growth across core categories.
Furthermore, strategic investments across e-commerce and direct-to-consumer channels can result in the opening up of new avenues for growth and consumer engagement. Therefore, Conagra Brands, Inc. (NYSE:CAG)’s portfolio of well-known consumer brands, together with an established distribution network and scale advantages, can act as competitive advantages.
11) Invitation Homes Inc. (NYSE:INVH)
52-week Low: $30.13
Price as of 24 January: $30.51
Number of Hedge Fund Holders: 28
Invitation Homes Inc. (NYSE:INVH) is a premier single-family home leasing and management company. The company’s stock was impacted by factors including increased supply pressures across key markets of Phoenix, Tampa, Orlando, and Dallas. Notably, this additional inventory can impact the rental rates and occupancy levels. However, Invitation Homes Inc. (NYSE:INVH)’s strategic focus on high-barrier markets near employment centers, schools, and transportation hubs placed it well within the competitive SFR (single-family rental) landscape.
The broader sector growth continues to be driven by factors including housing affordability challenges and changing demographic preferences. As such, Invitation Homes Inc. (NYSE:INVH) capitalized on such trends, developing a portfolio of properties catering to a diverse range of tenants looking for the benefits of single-family living. Such trends are expected to result in sustained demand for Invitation Homes Inc. (NYSE:INVH)’s properties, enabling steady rent growth and increased occupancy rates.
Notably, as affordability challenges persist, the company is expected to benefit from longer average tenant stays. This will help reduce turnover costs and provide more stable cash flows. Furthermore, the company’s strategic JVs and property management platform expansion offer significant opportunities to see growth beyond its owned portfolio. Barclays maintained a “Buy” rating on the company’s shares, providing a price target of $36.00.