Is APA Corporation (APA) A Good Stock To Buy?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider APA Corporation (NASDAQ:APA) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is APA a good stock to buy? APA Corporation (NASDAQ:APA) investors should pay attention to an increase in enthusiasm from smart money lately. APA Corporation (NASDAQ:APA) was in 42 hedge funds’ portfolios at the end of March. The all time high for this statistic is 45. Our calculations also showed that APA isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In today’s marketplace there are a lot of gauges market participants put to use to analyze stocks. A pair of the most under-the-radar gauges are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the elite fund managers can outclass the broader indices by a healthy margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

David Tepper of Appaloosa Management LP

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Do Hedge Funds Think APA Is A Good Stock To Buy Now?

At first quarter’s end, a total of 42 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards APA over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, D E Shaw was the largest shareholder of APA Corporation (NASDAQ:APA), with a stake worth $165.2 million reported as of the end of March. Trailing D E Shaw was Citadel Investment Group, which amassed a stake valued at $62 million. Arrowstreet Capital, Appaloosa Management LP, and Masters Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Arctis Global allocated the biggest weight to APA Corporation (NASDAQ:APA), around 3.27% of its 13F portfolio. Anomaly Capital Management is also relatively very bullish on the stock, earmarking 2.57 percent of its 13F equity portfolio to APA.

Consequently, specific money managers have jumped into APA Corporation (NASDAQ:APA) headfirst. D E Shaw, managed by D. E. Shaw, initiated the most outsized position in APA Corporation (NASDAQ:APA). D E Shaw had $165.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $62 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, David Tepper’s Appaloosa Management LP, and Mike Masters’s Masters Capital Management.

Let’s now take a look at hedge fund activity in other stocks similar to APA Corporation (NASDAQ:APA). These stocks are Pinnacle Financial Partners, Inc. (NASDAQ:PNFP), Change Healthcare Inc. (NASDAQ:CHNG), Stifel Financial Corp. (NYSE:SF), Planet Fitness Inc (NYSE:PLNT), Texas Roadhouse Inc (NASDAQ:TXRH), C3.ai, Inc. (NYSE:AI), and First Financial Bankshares Inc (NASDAQ:FFIN). This group of stocks’ market caps match APA’s market cap.

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As you can see these stocks had an average of 26.4 hedge funds with bullish positions and the average amount invested in these stocks was $561 million. That figure was $498 million in APA’s case. Change Healthcare Inc. (NASDAQ:CHNG) is the most popular stock in this table. On the other hand First Financial Bankshares Inc (NASDAQ:FFIN) is the least popular one with only 11 bullish hedge fund positions. APA Corporation (NASDAQ:APA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for APA is 72.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. Hedge funds were also right about betting on APA as the stock returned 15.5% since the end of Q1 (through 6/18) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.