Apache Corp (APA)

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.

Energy's rolling over and Apache's leading the way.

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, Egypt, the United Kingdom North Sea, Australia and Argentina.

It is a well run company, which can quickly adapt to market conditions and has some exciting long term projects coming on line soon especially in Egypt and South America. Low P/E ratios and Qtrly Rev Growth well above industry average as well as Stella operating margins.

Same reasoning as before: generic slowdown play. I see OPEC cuts as bearish, not bullish, for the oil complex. Demand shocks are good for prices and profits; supply shocks are only good for OPEC, and sometimes not even then.

Re-reentry after gains harvest. Stupid CAPS.

It's about oil. Enough said.

Oil is not going away anytime soon. We are not going to stop driving and all of a sudden start taking public transportation.... we don't have the infrastructure. Politically, this is a good play, seems that the Democratic house and Senate are buying into TBP plan for wind in the midwest and natural gas as the bridge for transportation. I do not underestimate the fact that Nancy Pelosi has purchased stock in natural gas suppliers and since they (Democrats) are almost certain to make the stupid move of taxing big oils "windfall profits" I believe that these stocks will continue to go up.

Low cost operator and great overseas opportunity to expand reserves base

Natural gas is likely to become the dominant energy source in the future and its price is likely to reflect this.

I see this stock as a value pick, cheap at present price.

Its called peak oil and its coming to a town near you. Rip out your grass and plant grains and fill your portfolio with companies that know how to get the last drops of crude from those dying oil fields.

You may also want to stock pile tuna and condensed milk.

Lean & Mean

Steady to higher crude oil and natural gas prices combined with a well managed company.

Solid, predictable cash flow; good valuation.

This is a great play on a North American oil and gas company that is safe with ever-growing assets. Oil and gas have bottomed out and will continue to rise and may rise very quickly if more war breaks out in the Middle East, which is very likely.

On Sale

Makes sense.

Stats on APA:

P/E = 13.07
PEG = 0.37
Y-O-Y Growth Rate (Earnings) = 35.05%

Currently trading at a 22% discount to intrinsic value based on earnings.

Oil & Gas play. My favorite of all the oil and gas companies.

When we figure out how to use Skittles as fuel I will sell this stock. Until then this seems like a bargain.

Great natural gas reserves.