We recently compiled a list of the 10 Most Volatile Stocks To Buy Right Now. In this article, we are going to take a look at where Devon Energy (NYSE:DVN) stands against the other volatile stocks.
Impact of Geopolitics on Investor Psyche and Investment Planning
In an interview on Bloomberg on October 2, Jimmy Chang, CIO at Rockefeller Global Family Office, shared his insights on how geopolitical events, such as the recent conflict between Iran and Israel, affect the investor psyche and investment planning. Chang emphasized the importance of separating noise from signals, noting that markets have been conditioned to react temporarily to such events, only to return to normal once the situation is controlled. He predicted that the market would likely move past the current conflict unless there is further escalation.
Chang also discussed the cumulative effect of various conflicts and geopolitical disruptions, including the Ukraine-Russia war and the changing of the guard in terms of presidential elections. He noted that the US election is a bigger catalyst in the near term, with a potential Trump victory being more disruptive to foreign policies, particularly regarding the war in Ukraine and support for Israel. Chang also highlighted the impact of the US market’s inward focus, with investors tending to dismiss overseas events, despite the potential for emerging markets to outperform.
Regarding the US election, Chang noted that his clients are interested in the outcome but have a long-term view, which has not altered their strategic allocation. However, tactically, they may play out different scenarios, such as a blue sweep, which could be viewed as negative for equities and positive for bonds, or a Trump victory, which could be more inflationary and positive for equities. Chang also discussed the potential for tailwinds, such as interest rates coming down and an economy doing better than expected, to outweigh any potential negatives from the election.
Chang expressed concerns about other risks, such as the port and Boeing strikes, which could have significant economic consequences if they drag on. He noted that these events could disrupt the market’s complacency about the interest rate-cutting cycle and potentially lead to inflation coming back. Despite these risks, Chang does not believe that the latest headlines are enough to derail the bull market, predicting a potential 5% pullback before the focus shifts to earnings season and the elections.
Overall, Chang’s comments provide insight into how investors navigate the complex geopolitical landscape and the potential impact of the US election on markets. While there are risks and uncertainties, investors are optimistic about the market’s ability to move past these events and continue expansion. With that in context, let’s take a look at the 10 most volatile stocks to buy right now.
Our Methodology
To compile our list of the 10 most volatile stocks to buy right now, we used the Finviz and Yahoo stock screeners to find the largest companies with a beta of more than 2. We then narrowed our choices to 10 stocks according to their hedge fund sentiment, which was taken from our database of 912 elite hedge funds as of Q2 of 2024. The list is sorted in ascending order of their hedge fund sentiment, as of the second quarter.
Why do we care about what hedge funds do? 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).
A group of technicians in hazmat suits inspecting a natural gas storage tank.
Devon Energy (NYSE:DVN)
Number of Hedge Fund Investors: 52
Beta: 2.06
Devon Energy (NYSE:DVN) is an independent oil and natural gas exploration and production company based in the United States. The company operates primarily in North America and focuses on high-quality resources, including the Delaware Basin.
On September 27, Devon Energy (NYSE:DVN) completed the acquisition of Grayson Mill, a strategic acquisition in the Williston Basin. The company’s acquisition of Grayson Mill adds 307,000 net acres to its portfolio and is expected to add 100,000 barrels of oil equivalent per day (BOE/D) to its production in FY 2025. The deal is expected to be accretive to earnings and is set to close by the end of the third quarter.
Devon Energy (NYSE:DVN) production guidance for FY 2024 has been revised upward, with total oil production expected to reach 324,000 BOE/D, showing a 3% increase compared to the previous outlook. Total production, including NGL and natural gas, is expected to hit 677-688 MBOE/D, showing 5% growth compared to the earlier projection.
In Q2, Devon Energy reported a revenue of $3.9 billion, up 8.9% compared to the previous quarter. Net income of $844 million, and EPS of $1.41. The company has also increased its stock buyback authorization to $5 billion, by 67%, making it a more attractive capital return play. Devon Energy (NYSE:DVN) has consistently bought back its shares in the market and has achieved a total shareholder distribution of $532 million in the second quarter.
Devon Energy (NYSE:DVN) strategic acquisition, increased stock buyback authorization, and attractive valuation make it a compelling investment opportunity in the energy sector.
Overall DVN ranks 9th on our list of the most volatile stocks to buy. While we acknowledge the potential of DVN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DVN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.