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.
10) American Homes 4 Rent (NYSE:AMH)
52-week Low: $33.75
Price as of 24 January: $34.60
Number of Hedge Fund Holders: 30
American Homes 4 Rent (NYSE:AMH) is a leading large-scale integrated owner, operator, and developer of single-family rental homes. The company continues to navigate a tough business environment amidst shifting demand dynamics and increasing competition. The increased competition is mainly from homebuilders who are entering the single-family rental market. That being said, Morgan Stanley analyst Adam Kramer upgraded the shares of American Homes 4 Rent (NYSE:AMH) from “Equal-weight” to “Overweight,” raising the target price from $39 to $40.00.
As per the analyst, American Homes 4 Rent (NYSE:AMH)’s proven and steady development platform is expected to help it achieve earnings growth in the years ahead. With a portfolio of homes focused mainly on rental purposes, the company is well-placed to capitalize on the increased demand for single-family rentals due to the unaffordability of homeownership in several markets. Apart from this, elevated mortgage rates is another tailwind that can support the single-family rental market.
Furthermore, favorable demographic trends are likely to support American Homes 4 Rent (NYSE:AMH) in 2025. These trends include (but are not limited to) millennials starting families and wanting more space, and uncertainty regarding long-term housing commitments. Furthermore, the transition towards remote work resulted in increased demand for larger living spaces, supporting single-family rentals over traditional apartments. Such factors might lead to a “sticky” customer base for American Homes 4 Rent (NYSE:AMH).
9) The Hershey Company (NYSE:HSY)
52-week Low: $148.7
Price as of 24 January: $150.71
Number of Hedge Fund Holders: 33
The Hershey Company (NYSE:HSY) is engaged in the manufacturing and selling of confectionery products and pantry items. The company’s stock has been impacted by higher commodity costs and a shift in consumer behavior. There has been some softness in total snacking consumption in Q3 2024, with people prioritizing value and budgeting for meals. Amidst uncertainties, The Hershey Company (NYSE:HSY)’s progress in expanding into salty snacks, through the acquisition of brands such as SkinnyPop popcorn and Dot’s Pretzels, can act as growth catalysts.
Moving forward, the company’s strategic initiatives such as pricing strategies, product innovation, and cost-saving measures are expected to provide some relief. The Hershey Company (NYSE:HSY)’s focus on diversifying its product portfolio and expanding into healthier snack options might align with changing consumer preferences. The company’s competitive advantages including strong pricing power and disciplined capital allocation are expected to help it navigate challenges.
While The Hershey Company (NYSE:HSY)’s current portfolio remains focused on traditional confectionery products, it has opportunities to expand into healthier snack options. Through leveraging strong brand recognition and distribution networks, it can develop and market new products focused on healthier eating. Therefore, successful expansion into this ever-growing market segment can offset negative momentum in traditional chocolate sales.
8) Bunge Global SA (NYSE:BG)
52-week Low: $75.75
Price as of 24 January: $77.19
Number of Hedge Fund Holders: 33
Bunge Global SA (NYSE:BG) is an agribusiness and food company. The company’s stock faced pressures, resulting from market volatility due to fluctuations in commodity prices and geopolitical tensions. Furthermore, the company has been navigating shifts in global agricultural trade patterns and supply chain disruptions. However, Bunge Global SA (NYSE:BG)’s long-term growth outlook seems to be promising as it continues to expand its global footprint.
Its strong focus on emerging markets, mainly in South America and Asia, places it well to capitalize on elevated food demand and changing dietary patterns in these regions. With economies continuing to develop and populations continuing to grow, Bunge Global SA (NYSE:BG)’s diversified portfolio of agricultural products and food ingredients is expected to witness sustained demand growth. Furthermore, the company’s investments in value-added products and sustainable practices remain as per global trends focused towards healthier and more environmental-friendly food options.
This strategic positioning is expected to fuel the long-term growth of Bunge Global SA (NYSE:BG) as consumer preferences continue to evolve and regulatory environments shift to more sustainable agricultural practices. Bunge Global SA (NYSE:BG) is expected to build its earnings power over time via a combination of strategic M&A, organic growth projects, and buybacks. Also, the company’s supply chain and logistics network, together with global scale and diversified operations, can fuel its long-term growth prospects.
7) Vail Resorts, Inc. (NYSE:MTN)
52-week Low: $165
Price as of 24 January: $166.7
Number of Hedge Fund Holders: 38
Vail Resorts, Inc. (NYSE:MTN) operates mountain resorts and regional ski areas. The company’s stock was pressured in recent weeks as a result of a labor dispute. The company was seen grappling with an ongoing ski patrol strike at its Park City Mountain location. The Park City Professional Ski Patrol Association was pushing for improvement in wages and working conditions. However, Shaun Kelley, an analyst from Bank of America Securities, reiterated a “Hold” rating on Vail Resorts, Inc. (NYSE:MTN)’s shares. The associated price target was $200.00.
The company reported certain ski season metrics for the comparative periods from the beginning of the ski season through January 5, 2025, and for the prior year period through January 7, 2024. As per Shaun Kelley, Vail Resorts, Inc. (NYSE:MTN)’s early season metrics were largely in line with expectations, with visitation marginally down by 0.3% YoY. However, lift ticket revenues rose by 4.5%, courtesy of season pass sales. Despite some weakness in the visitation at destination resorts, healthy local conditions and favorable performance in the Northeast supported balancing these results.
For the remainder of the season, Vail Resorts, Inc. (NYSE:MTN) expects an improvement in performance as compared to the season-to-date period given the significant base of pre-committed guests, current lodging booking trends, and historical guest behavior patterns. Furthermore, the company’s strategic scalability and pricing power are expected to provide support. Vail Resorts, Inc. (NYSE:MTN)’s irreplaceable assets help in building significant competitive advantages in an industry having high barriers to entry.
6) ON Semiconductor Corporation (NASDAQ:ON)
52-week Low: $53.1
Price as of 24 January: $54.50
Number of Hedge Fund Holders: 45
ON Semiconductor Corporation (NASDAQ:ON) offers intelligent sensing and power solutions. The company’s stock has been facing headwinds as a Truist analyst cited weaker demand trends. That being said, Evercore ISI affirmed its positive stance on the company’s shares and maintained an “Outperform” rating, with a price target of $107.00. The firm has a stronger long-term outlook for ON Semiconductor Corporation (NASDAQ:ON) as a result of several key factors.
Some of the factors include the company’s ongoing turnaround efforts and the potential for strong revenue generation from its Treo platform. Evercore ISI expects an improvement in ON Semiconductor Corporation (NASDAQ:ON)’s gross margins by the end of 2026. Notably, a cyclical recovery, together with a reduction in supply chain inventories to below-normal levels, is expected to lead to this improvement.
Elsewhere, Loop Capital initiated coverage on the shares of ON Semiconductor Corporation (NASDAQ:ON), providing a “Buy” rating with a price target of $95. The firm highlighted the company’s strong position in the automotive market. ON Semiconductor Corporation (NASDAQ:ON) has strengthened its ties with DENSO, with plans to support technologies for autonomous driving (AD) and advanced driver assistance systems (ADAS). The global pivot to EVs has been creating significant demand for semiconductors used in powertrain systems, battery management, and charging infrastructure. The company provides silicon carbide power solutions, which can help improve energy efficiency, range, and performance in EVs.
5) Electronic Arts Inc. (NASDAQ:EA)
52-week Low: $115.45
Price as of 24 January: $116.56
Number of Hedge Fund Holders: 46
Electronic Arts Inc. (NASDAQ:EA) develops, markets, and publishes games, content, and services for game consoles, PCs, mobile phones, and tablets. The company revealed disappointing preliminary Q3 2025 results, highlighting subdued growth. It now expects a mid-single-digit decline in live services net bookings as compared to its earlier forecast of mid-single-digit growth. The company mentioned that Global Football accounts for the majority of the change. Furthermore, disappointing engagement from titles such as Dragon Age created headwinds.
Amidst a challenging environment, Benchmark analyst Mike Hickey maintained a “Buy” rating on the shares of the company with a price target of $163.00. Electronic Arts Inc. (NASDAQ:EA) remains confident in its long-term strategy. It expects a rebound and return to growth by fiscal 2026. Electronic Arts Inc. (NASDAQ:EA) also anticipates growth as it launches more of its iconic franchises. Its strategic pivot to digital platforms places it well to capitalize on the increasing trend of online and mobile gaming.
Electronic Arts Inc. (NASDAQ:EA)’s investment in generative AI technologies is expected to be a significant driver of future growth. Integration of AI possesses the potential to streamline game development processes, which can help reduce costs and time-to-market for new titles. With the company continuing to explore and implement AI solutions, it can gain a competitive edge in game development efficiency and quality of its offerings.
4) Mondelez International, Inc. (NASDAQ:MDLZ)
52-week Low: $55.97
Price as of 24 January: $57.42
Number of Hedge Fund Holders: 51
Mondelez International, Inc. (NASDAQ:MDLZ) manufactures, markets, and sells snack food and beverage products. The company’s stock has been facing pressures primarily because of higher input costs and geopolitical headwinds. Mondelez International, Inc. (NASDAQ:MDLZ) continues to address significant input cost headwinds because of elevated cocoa prices, which might remain elevated into early 2025. Despite cost-management efforts, the chocolate segment’s profitability is expected to fall short of historical levels, mainly in H1 2025. Therefore, sustained cost pressures can impact margins.
That being said, Piper Sandler maintained an “Overweight” rating on the shares of Mondelez International, Inc. (NASDAQ:MDLZ). Despite the challenges due to the rising cost of cocoa, it is expected to have its cocoa needs covered for 2025. Furthermore, the company continues to take proactive measures to manage its supply chain. Amidst inflationary pressures and rising input costs, the company has been implementing strategic pricing actions throughout its markets.
Mondelez International, Inc. (NASDAQ:MDLZ)’s strong brand equity offers some pricing power, enabling it to pass on some portion of higher costs to consumers without significant market share loss. The company’s diverse product portfolio also allows it for strategic pricing throughout different product categories and price points, supporting the maintenance of overall margins. The potential for margin improvement with the help of pricing strategies remains important considering higher cocoa costs.
3) BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)
52-week Low: $60.63
Price as of 24 January: $61.73
Number of Hedge Fund Holders: 54
BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) is engaged in the development and commercialization of therapies for people having serious and life-threatening rare diseases and medical conditions. The company’s stock has been subject to the competitive landscape of the broader pharmaceutical industry and the heightened impact of global economic headwinds. Its shares saw the potential impact of Ascendis Pharma’s positive trial results on the Voxzogo franchise. To give a brief context, Voxzogo is BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)’s treatment for achondroplasia.
Despite competitive pressures, Goldman Sachs reiterated its “Buy” rating on the company’s shares, maintaining a price target of $127.00. This rating is backed by the fact that BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) seeks to strengthen its market position with its product Voxzogo. The company continues to focus on expanding Voxzogo into additional markets by 2027. Furthermore, Wedbush analyst Yun Zhong maintained a “Buy” rating on the company’s shares, setting a price target of $94.00.
Wedbush analyst stated that BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)’s healthy revenue growth and strong pipeline development support optimistic views. The company’s management continues to exhibit confidence in maintaining market leadership, mainly with Voxzogo, through expansion into new international markets and leveraging new clinical guidelines. Furthermore, its global footprint aids the strategy for continued revenue growth.
2) Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
52-week Low: $666.2
Price as of 24 January: $675.79
Number of Hedge Fund Holders: 62
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) discovers, invents, develops, manufactures, and commercializes medicines for treating various diseases. The company’s stock was negatively impacted by the challenging environment related to its flagship EYLEA franchise. The potential entry of Amgen’s Pavblu poses a threat to EYLEA’s market dominance. However, in response to such challenges, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) continues to actively transition patients to its high-dose formulation, EYLEA HD. This strategy focuses on maintaining market share and mitigating the impact of biosimilar competition.
Bernstein analysts maintained their “Outperform” rating on the company’s shares, giving a price target of $1,070.00. The analysts have received confirmation of Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)’s strategic emphasis on advancing its pipeline. As per the analysts, the management’s intention to shift the focus to pipeline development can be seen as a positive step. The company’s efforts to emphasize its pipeline are targeted at ensuring long-term growth and catering to unmet medical needs across different therapeutic areas. Elsewhere, Truist Securities maintained a “Buy” rating with a $1,004.00 price target.
As per Truist Securities, the momentum of Dupixent, which is another of the company’s products, is expected to continue. Notably, the drug is poised for potential expansion into new indications, which include chronic obstructive pulmonary disease (COPD). Baron Funds, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:
“We purchased Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), a biopharmaceutical company that was built on a foundation in basic scientific research and antibody development. The company has successfully developed several blockbuster medicines, including Eylea and Eylea HD for retinal diseases (such as wet age-related macular degeneration, diabetic macular edema, and diabetic retinopathy) and Dupixent for immunological and inflammatory diseases (such as atopic dermatitis, asthma, and COPD). While Eylea is nearing the end of its patent life and faces potential biosimilar competition, the company has been transitioning patients to Eylea HD, which is a higher dose, longer-acting formulation of Eylea, and Dupixent is growing rapidly through indication expansion. Beyond the current product portfolio, Regeneron has an exciting new product pipeline with over 35 candidates in various stages of development, including a novel treatment for treating severe food allergy, a combination checkpoint inhibitor therapy for melanoma, lung cancer and other solid tumors, biospecific antibodies for blood cancers, and Factor XI antibodies for blood clot prevention, among others. Based on Regeneron’s track record of success discovering and developing new drugs, we are optimistic the pipeline will deliver some successes, which we think will drive upside in the stock.”
1) Merck & Co., Inc. (NYSE:MRK)
52-week Low: $94.48
Price as of 24 January: $95.55
Number of Hedge Fund Holders: 86
Merck & Co., Inc. (NYSE:MRK) operates as a healthcare company. The company’s stock has been facing pressures as a result of headwinds such as declining sales of the human papillomavirus (HPV) vaccine, Gardasil, and diabetes drug, Januvia. Much of the decline in the stock price came due to the poor performance of the broader drug and biotech sector after Donald Trump chose Robert F. Kennedy Jr., a vaccine skeptic, as the next secretary of the Department of Health and Human Services. Despite the challenges, on January 14, Jefferies analyst Akash Tewari maintained a “Buy” rating on shares of Merck & Co., Inc. (NYSE:MRK), with a price target of $150.
This rating was supported by Merck & Co., Inc. (NYSE:MRK)’s plans to roll out a subcutaneous (under the skin) version of Keytruda earlier than anticipated. To give a brief context, a subcutaneous version of Keytruda refers to the reformulated version of the company’s cancer immunotherapy drug, designed to be administered as an injection under the skin instead of the current intravenous infusion. As per the analyst, the decision to accelerate the program is expected to allow Merck & Co., Inc. (NYSE:MRK) to capture greater market share and garner robust revenue. Furthermore, the analyst remains optimistic about the company’s strategic upgrades to other therapeutics.
The company has a strong position in the oncology market, mainly because of the success of Keytruda. GreensKeeper Asset Management, an investment management company, released its third-quarter investor letter. Here is what the fund said:
“Merck & Co., Inc. (NYSE:MRK) was our second-largest detractor this quarter, declining -8.3%. MRK’s leading HPV vaccine, GARDASIL 9, faced challenges internationally due to inventory buildup within its Chinese distributor, which is expected to reduce shipments for the remainder of 2024. Despite this short-term impact, the long-term outlook for GARDASIL 9 remains promising. Meanwhile, the company’s $27 billion Keytruda cancer juggernaut continues to grow at a healthy clip, powering earnings growth.”
While we acknowledge the potential of MRK as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than MRK 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 Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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