Oil prices have been on a turbulent ride, with WTI crude slipping to a six-month low near $66 per barrel due to economic concerns in the United States and China, global trade tensions and a potential supply surplus. The International Energy Agency (IEA) now projects global oil demand growth at just 1.03 million barrels per day, a downward revision fueled by weak macroeconomic conditions and rising OPEC+ production.
Additionally, geopolitical factors, including ongoing trade wars and the uncertainty surrounding U.S.-Russia sanctions, continue to weigh on sentiment. Despite occasional rebounds — driven by factors like rising gasoline demand and a weaker U.S. dollar — the broader market outlook remains cautious. With Federal Reserve rate cut expectations adding a potential stabilizing force, investors remain watchful of supply-demand imbalances.
Given this backdrop, investors should seek undervalued energy stocks that can capitalize on volatility while limiting downside risk. Stocks trading under $5 (known as “penny stocks”) often present such opportunities, though they also come with heightened risk and price swings. To mitigate this, we have identified three Zacks Rank #2 (Buy) stocks with solid fundamentals and growth potential. These include Amplify Energy AMPY, Harbour Energy HBRIY and Nine Energy Service NINE. These companies have a Value Score of A that offers an attractive entry point amid oil market uncertainty.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amplify Energy: This Houston, TX-based operator has a strong presence in Oklahoma, Southern California and Texas and has stakes such as Bairoil in the Rocky Mountains. Amplify Energy’s diversified operations — spread over five U.S. basins — mitigate pricing and operational disruptions while its long-life, long-production assets generate sustainable cash flows.
Amplify Energy’s merger with Juniper Capital’s portfolio companies is a game-changer, significantly expanding its oil-weighted asset base. The deal adds 50 million barrels of proved reserves and a PV-10 valuation of $614 million. With 287,000 net acres adjacent to major oil producers, the acquisition strengthens Amplify’s operational footprint. Expected cost synergies, including reduced G&A expenses and tax advantages, will drive increased free cash flow, making the transaction highly accretive starting in 2025.
AMPY shares trade for less than $4 as of this writing. An incredible bargain for investors, the Zacks Consensus Estimate for 2025 earnings of AMPY indicates 66.7% growth.
Nine Energy Service: It specializes in offering completion solutions to energy firms within North America and abroad. With a footprint in every major North American basin, the company has a diverse, blue-chip customer base with minimal concentration. NINE is distinguished by its years of experience, strong dedication to delivering intelligent and tailored solutions, and the utilization of world-class resources to enhance efficiencies.
With over 30% of its revenue tied to natural gas basins, Nine Energy stands to benefit from rising gas prices and increased LNG exports. Management sees a more favorable gas price environment in 2025, potentially spurring activity in previously depressed regions like Haynesville and the Northeast. Additionally, NINE is expanding its international tools market, leveraging its R&D capabilities in Norway. A new state-of-the-art completion tools R&D facility in Texas will accelerate innovation and commercialization, further strengthening the company’s competitive edge.
At just $1.19 per share, this stock offers an attractive entry point for investors interested in the energy sector.
Harbour Energy: A pure-play upstream global oil and gas producer, Harbour Energy targets high-return, short-cycle drilling opportunities. The company's robust financial position and strict capital discipline support competitive shareholder returns and the optionality to grow inorganically. Harbour Energy's $11.2 billion deal to acquire substantially all of Wintershall Dea AG's upstream assets has augmented its asset base significantly.
Harbour Energy completed its acquisition of Wintershall Dea’s assets in September 2024, marking its largest and most significant deal to date. This move substantially expanded the company’s global presence, tripling its reserves and diversifying its revenue streams. With production reaching 258,000 barrels of oil equivalent per day (boepd) in 2024 and expected to climb to 450,000-475,000 boepd in 2025, Harbour is positioned for sustained growth. The acquisition also improved cost efficiency, helping reduce operating costs by 15%, strengthening financial resilience and free cash flow generation.
At approximately $2.56 per share, HBRIY presents an appealing opportunity for investors looking to add to their portfolio at a reasonable valuation.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>Nine Energy Service, Inc. (NINE) : Free Stock Analysis Report
Amplify Energy Corp. (AMPY) : Free Stock Analysis Report
Harbour Energy PLC Sponsored ADR (HBRIY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
%20Price%2FEarnings%20%26%20PEG%20Ratios%20%7C%20Nasdaq&_biz_n=27&rnd=686362&cdn_o=a&_biz_z=1743051895587)
%20Price%2FEarnings%20%26%20PEG%20Ratios%20%7C%20Nasdaq&_biz_n=28&rnd=607788&cdn_o=a&_biz_z=1743051895688)
%20Price%2FEarnings%20%26%20PEG%20Ratios%20%7C%20Nasdaq&_biz_n=29&rnd=916076&cdn_o=a&_biz_z=1743051895688)
