$94.90
-1.47 (-1.53%)
Apache Corp (APA)
CAPS Rating:
An independent energy company that explores for, develops and produces natural gas, crude oil and natural gas liquids.
An independent energy company that explores for, develops and produces natural gas, crude oil and natural gas liquids.
Recs
An oil-n-gas sector play, this stock should be a winner for some time to come. Given the present investing climate of rising oil prices and seemingly insatiable demand for oil, I think this stock, with its very fair PEG ratio of 1.09 and an incredibly low EnterpriseValue-to-EBITDA ratio of only 6, is a bargain right now, with that fact screaming at me just like their Indian namesake. I only wished I'd stumbled across it sooner!
This company has interests in all the right places in the world: Gulf of Mexico, Texas, Australia, the North Sea, Argentina, Egypt, and Western Canada. Projected growth rates for the 1-yr, 3-yr and 5-yr time frames are all double-digits (10.2%, 11.8% and 27.6%, respectively). Their margins are extremely healthy at 30% (Profit) and 51.5% (Operating). Return on Assets is good at 12.9%, but their Return on Equity is excellent at 22.6%. Revenue steadily increased all of last year (2007), rising 50% from the 1st quarter to the 4th quarter -- unbelievable! Apache grew yearly revenue from $8.07B in 2006 to $9.96B in 2007, a 23.4% increase. Very nice. The only question is: can it sustain this growth? With an operating cash flow of $6.42B, I think it can.
But has anyone done a DCF (Discounted Cash Flow) analysis on Apache? If you're willing to share that with me, please post a Reply below. Thanks!
SOURCES: Motley Fool and Yahoo! Finance.