5 Best Stagflation Stocks to Buy Now

4. APA Corporation (NASDAQ:APA)

Number of Hedge Fund Holders: 36

APA Corporation (NASDAQ:APA) is a Texas-based company that explores for, develops, and produces oil and gas properties. Heading into the winter, energy stocks like APA Corporation (NASDAQ:APA) will potentially continue to benefit despite a stagflationary economic backdrop. On September 14, APA Corporation (NASDAQ:APA) declared a $0.25 per share quarterly dividend, a 100% increase from prior its dividend of $0.13. The dividend is payable on November 22, to shareholders of record on October 21. The board of directors also authorized an additional 40 million shares for repurchase.

On September 19, Truist analyst Neal Dingmann raised the price target on APA Corporation (NASDAQ:APA) to $75 from $66 and reaffirmed a Buy rating on the shares. The stock’s outperformance is anticipated to continue as the company’s diversified operations generate robust free cash flows, as per the analyst. The analyst added that APA Corporation (NASDAQ:APA)’s operational and financial confidence is attested by the latest increase to its dividend along with an elevated share buyback program, with cash flows reaching levels that support a higher floor for management’s 60% payout formula.

Among the hedge funds tracked by Insider Monkey, 36 funds were long APA Corporation (NASDAQ:APA) at the end of June 2022, compared to 46 funds in the earlier quarter. Harris Associates is the leading position holder in the company, with 16.7 million shares worth about $582 million. 

Here is what Oakmark Select Fund has to say about APA Corporation (NASDAQ:APA) in its Q1 2022 investor letter:

“Our oil holding, APA Corporation (NASDAQ:APA) (+54%) was one of our top contributors in the quarter as oil prices rallied due to tight supplies, which were then exacerbated by the Russian invasion of Ukraine. Although their share prices have increased considerably, both companies still look quite undervalued even using longer term oil prices in the $65-70 dollar range. Meanwhile, if times are good over the next couple of years, we expect these companies to return significant percentages of their market caps to shareholders.”