5 Value Stocks to Buy According to Billionaire David Tepper

2. APA Corporation (NASDAQ:APA)

Appaloosa Management’s Stake Value: $8,266,000

Percentage Of Appaloosa Management’s 13F Portfolio: 0.33%

Number of Hedge Fund Holders: 46

PE Ratio as of June 23: 5.38

APA Corporation (NASDAQ:APA) is a Houston, Texas-based company involved in hydrocarbon exploration.

In Q1 2022, APA Corporation (NASDAQ:APA) posted revenue of $3.83 billion, surpassing the consensus estimate by $1.39 billion. On June 23, John Freeman at Raymond James reiterated a Strong Buy rating on APA Corporation (NASDAQ:APA) with a price target of $75. While the analyst stated that he doesn’t see a near-term catalyst for the stock, he expressed his positive outlook on APA Corporation’s (NASDAQ:APA) strong free cash flow generation capacity and distribution structure.

The stock is currently trading at $36.2 per share with a PE ratio of 5.38x. APA Corporation (NASDAQ:APA) has a P/S ratio of 1.69x, compared to the industry’s average of 2.29x. Furthermore, the stock’s P/CF ratio stands at 3.84x as opposed to the industry’s average of 11.11x. These valuation metrics coupled with strong business operations make APA Corporation (NASDAQ:APA) an attractive stock for value investors.

Here’s what Ariel Investments said about APA Corporation (NASDAQ:APA) in its Q4 2021 investor letter:

“We continue to believe recent aggressive fiscal and monetary policy will drive high levels of intransient (rather than transitory) inflation. Recent inflation numbers have exceeded our hawkish predictions. While we believed the Consumer Price Index might rise +4% in 2021, double the Fed target of +2%; it rose +7%, the highest level in forty years. Ariel Focus Fund has been well positioned for this environment as natural resource and material companies such as APA Corporation (APA) which returned +90.76% for the year. This was one of our two largest holdings at year-end and have performed well very early into 2022.”

APA Corporation (NASDAQ:APA) was held by 46 hedge funds at the end of Q1 2022.