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2 Stocks Down 52% and 28% to Buy Right Now
DVNDevon Energy(DVN) The Motley Fool·2025-01-04 16:05

Group 1: Nio (NIO) - Nio's stock experienced a significant decline of approximately 52% in 2024, following a 24% increase in 2023, driven by factors such as new European tariffs and decreasing revenue [3] - Despite the stock's decline, customer demand remains strong, with Nio reporting 31,138 vehicle deliveries in December 2024, a year-over-year increase of 73%, and a total of 221,970 vehicles delivered in 2024, marking a 39% increase from 2023 [4] - Nio has expanded its vehicle offerings with the launch of the L60, a mid-size SUV aimed at families, which has seen a notable increase in deliveries from 4,319 in October to 10,528 in December [5] - Financially, Nio reported a gross margin of 10.7% in Q3 2024, an increase of 270 basis points year-over-year, and positive free cash flow is expected to continue into Q4 2024 [6] Group 2: Devon Energy (DVN) - Devon Energy's share price fell nearly 28% last year, presenting a buying opportunity, despite the oil price remaining stable around 71perbarrel[7]−Thedeclineinsharepriceisattributedtofactorsotherthanoilprices,includingtheacquisitionofGraysonMillEnergyandafocusondebtrepaymentandsharebuybacksratherthanvariabledividendsin2024[8]−TheacquisitionisexpectedtoenhanceDevon′sassetbaseintheBakkenregionandcreateopportunitiesforcostsynergiesthroughsharedtechnologyandinfrastructure[9]−Devon′scapitalallocationstrategyaimstoimproveitsbalancesheetpost−acquisition,andinvestmentsincoreassetsinthePermianregionhaveledtoimprovedoilwellperformance[10]−AnalystsprojectDevonEnergy′sfreecashflowtoaverageabout71 per barrel [7] - The decline in share price is attributed to factors other than oil prices, including the acquisition of Grayson Mill Energy and a focus on debt repayment and share buybacks rather than variable dividends in 2024 [8] - The acquisition is expected to enhance Devon's asset base in the Bakken region and create opportunities for cost synergies through shared technology and infrastructure [9] - Devon's capital allocation strategy aims to improve its balance sheet post-acquisition, and investments in core assets in the Permian region have led to improved oil well performance [10] - Analysts project Devon Energy's free cash flow to average about 2.9 billion from 2024 to 2026, with a market cap of approximately $21.5 billion, indicating strong value potential if oil prices remain stable [11]