Player Avatar TSIF (99.96) Submitted: 2/23/2011 11:18:07 AM : Outperform Start Price: $115.60 APA Score: -30.93

Apache Corp has had an exceptionally nice growth rate over the last two years, but they have been oscilating in a 5% band the last few weeks since Egypt flared.

Apache Corp has some tie-ins to both the Middle East which is in disruption and to Australia which is suffering from weather induced cutbacks. In the Middle East, exposure appears to be limited, mostly over concern about contracts to Egypt that might not be honored. This appears unlikely after the resolutions last week. In Australia the closure of the gas production hub that services about 1/3rd of Western Austrailias needs should be temporary.

Overall, Apache has a very diversified global presence, expanded from acquistions it gained from BP and Mariner at reasonable prices. Global presence includes Austrailia, Chile, and the US. Margins have been exceptional and foward P/E continues to stay relatively low. Despite borrowing and issuing stock for acquisitons, Apache maintains good cash flow. IF oil/gas retreats, Apache remains a solid play. If they rise due to continued turmoil in the Middle East then Apache becomes a good arbitrage play.

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