Back to top

Image: Bigstock

Are Investors Undervaluing APA (APA) Right Now?

Read MoreHide Full Article

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

APA (APA - Free Report) is a stock many investors are watching right now. APA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 7.39 right now. For comparison, its industry sports an average P/E of 8.56. Over the past year, APA's Forward P/E has been as high as 9.67 and as low as 2.82, with a median of 5.84.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. APA has a P/S ratio of 1.37. This compares to its industry's average P/S of 1.77.

Finally, investors will want to recognize that APA has a P/CF ratio of 4.58. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. APA's current P/CF looks attractive when compared to its industry's average P/CF of 4.61. Within the past 12 months, APA's P/CF has been as high as 4.91 and as low as 2.08, with a median of 3.15.

Investors could also keep in mind Geopark (GPRK - Free Report) , an Oil and Gas - Exploration and Production - United States stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Furthermore, Geopark holds a P/B ratio of 4.10 and its industry's price-to-book ratio is 2.51. GPRK's P/B has been as high as 37, as low as 3.60, with a median of 5.23 over the past 12 months.

These are just a handful of the figures considered in APA and Geopark's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that APA and GPRK is an impressive value stock right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


APA Corporation (APA) - free report >>

Geopark Ltd (GPRK) - free report >>

Published in