Once it was the hottest oil and natural gas production region in the United States, and the top companies focused on the Permian Basin in West Texas and New Mexico performed well. Recently though, the ability to transport production has been hampered by pipeline capacity issues. As a result, some of the top Permian stocks have been hit hard, and investors are literally being offered some of the best entry points in years.

The SunTrust energy team, led by analyst Neal Dingmann, met with numerous companies last week, including those in the Permian Basin, and remain positive on the future.

The SunTrust report noted this:

We expect multiple catalysts ahead ie. notable well results/acquisitions. While Permian takeaway issues are obviously real, we believe most companies could fare better for the remainder of 2018 than prior estimates. We remain as positive on a number of exploration and production companies.

Five companies were highlighted as favorites from the analyst’s company visits, and all are rated Buy at SunTrust.

Cimarex Energy

This is a top play for investors looking to the Permian Basin. Cimarex Energy Co. (NYSE: XEC) is an independent exploration and production company. Its primary activities are in the Mid-Continent and Permian Basin areas of the United States. It has scattered positions around some of the top producing wells in the region.

The company is focused on increasing shareholder value through strategies linked to generating attractive economic returns on capital employed and profitable growth in per-share reserves, production and cash flow. It intends to profitably grow reserves and production through a balanced mix of exploration, exploitation and acquisitions.

Cimarex has a diversified base of high-quality production and attractive drilling opportunities. It should be noted that hedge funds have initiated sizable new positions in the company over the past year, and like its brethren in the Permian, many consider the company a very solid takeover target.

Cimarex investors are paid a small 0.3% dividend. The SunTrust price target for the stock is $135, and the Wall Street consensus target is $125.03. The shares closed Monday at $97.66.

Diamondback Energy

This is a top Permian Basin play for more aggressive accounts. Diamondback Energy Inc. (NASDAQ: FANG) is an independent oil and natural gas company headquartered in Midland, Texas, and focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian.

Diamondback’s activities are primarily focused on the horizontal exploitation of multiple intervals within the Wolfcamp, Spraberry, Clearfork and Cline formations.

Wall Street analysts have noted in the past the company’s top-tier asset base, solid accretive additions and financial discipline, which they think allows for not only continued solid cash flow, but could put the company in play as a takeover target. Diamondback continues to drill some of the most economical wells in the United States as efficiencies improve, costs decrease and activity remains in the better regions.

SunTrust has a $162 price target, while the consensus target is $159.88. The shares closed Monday at $129.30.

Matador

This has been mentioned recently as a potential takeover target. Matador Resources Co. (NYSE: MTDR) is independent energy company that engages in the exploration, development, production and acquisition of oil and natural gas resources in the United States.

The company primarily holds interests in the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. It also operates the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana and East Texas.

Since its IPO, Matador has grown its Permian acreage by more than tenfold as a result of acquisitions, and it has 2,151 net horizontal locations across multiple prospective zones.

The $45 SunTrust price target compares with a $37.56 consensus estimate. The shares closed Monday at $29.21.

Pioneer Natural Resources

Many Wall Street analysts love this stock for a pure crude oil play. Pioneer Natural Resources Co. (NYSE: PXD) operates a modern fleet of more than 24 top performing drilling rigs throughout onshore oil and gas producing regions of the United States and Colombia. Pioneer production services are supported by 100 well-servicing rigs, more than 100 cased-hole, open-hole and offshore wireline units, and a range of advanced coiled tubing units.

Pioneer is a huge player in the Permian Basin and the Eagle Ford in Texas, and the company owns more than 20,000 locations in the world’s second-largest oil reservoir in the Midland Basin. With a stellar balance sheet, the company is poised to remain a top player in the Permian as it expects to deliver solid production growth in 2018 and beyond.

The company’s unmatched depth of low-cost inventory and balance sheet allow it to compete favorably in both mild and moderate recovery case scenarios. In addition to asset and financial strength, many analysts feel that Pioneer offers the second highest multiple contraction among the large-cap Permian pure-play peers, as well as the highest free-cash-flow yield.

Pioneer investors are paid a tiny 0.05% dividend. SunTrust has set its price target at $235. The consensus price figure is $241.43, and shares closed trading on Monday at $185.21.

Whiting Petroleum

This is stock has been on fire but looks poised to go even higher. Whiting Petroleum Corp. (NYSE: WLL) is an independent oil and gas company that explores for, develops, acquires and produces crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain and Permian Basin regions of the United States.

The company’s largest projects are in the Bakken and Three Forks plays in North Dakota, the Niobrara play in northeast Colorado and its Enhanced Oil Recovery field in Texas.

Whiting posted first-quarter EBITDA of $354 million, which was better than expected, driven by better realizations as oil/gas differentials below the low end of guidance. Recent Mallow tests outperformed prior offset wells, highlighting continued completion optimization in the Bakken.

The SunTrust price target is $63. The consensus target is $53.67, and shares ended trading on Monday at $50.41.

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These five top stocks to buy have outstanding upside potential. It should be noted that these plays are better suited for more aggressive accounts and could be volatile going forward, especially if pricing dramatically declines.

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