Is APA Stock A Buy or Sell?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended December 31st, so let’s proceed with the discussion of the hedge fund sentiment on APA Corporation (NASDAQ:APA).

Is APA stock a buy? APA Corporation (NASDAQ:APA) investors should be aware of a decrease in hedge fund sentiment recently. APA Corporation (NASDAQ:APA) was in 35 hedge funds’ portfolios at the end of December. The all time high for this statistic is 45. There were 42 hedge funds in our database with APA holdings at the end of September. Our calculations also showed that APA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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John Overdeck of Two Sigma Advisors

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

At the end of the fourth quarter, a total of 35 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the previous quarter. The graph below displays the number of hedge funds with bullish position in APA over the last 22 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, D. E. Shaw’s D E Shaw has the number one position in APA Corporation (NASDAQ:APA), worth close to $136.6 million, corresponding to 0.1% of its total 13F portfolio. The second largest stake is held by Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $47.2 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish contain Ben Jacobs’s Anomaly Capital Management, Ken Griffin’s Citadel Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Anomaly Capital Management allocated the biggest weight to APA Corporation (NASDAQ:APA), around 2.76% of its 13F portfolio. SIR Capital Management is also relatively very bullish on the stock, earmarking 2.7 percent of its 13F equity portfolio to APA.

Seeing as APA Corporation (NASDAQ:APA) has faced a decline in interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few hedgies who were dropping their entire stakes heading into Q1. Interestingly, William B. Gray’s Orbis Investment Management sold off the biggest investment of the 750 funds watched by Insider Monkey, valued at close to $146.9 million in stock, and Anand Parekh’s Alyeska Investment Group was right behind this move, as the fund dumped about $14.5 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 7 funds heading into Q1.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as APA Corporation (NASDAQ:APA) but similarly valued. These stocks are Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI), Vroom, Inc. (NASDAQ:VRM), NOV Inc. (NYSE:NOV), KT Corporation (NYSE:KT), Cameco Corporation (NYSE:CCJ), WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), and MDU Resources Group Inc (NYSE:MDU). This group of stocks’ market caps match APA’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.7 hedge funds with bullish positions and the average amount invested in these stocks was $437 million. That figure was $371 million in APA’s case. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) is the most popular stock in this table. On the other hand KT Corporation (NYSE:KT) 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 71.3. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7.9% in 2021 through April 1st and still beat the market by 0.4 percentage points. Hedge funds were also right about betting on APA as the stock returned 33% since the end of Q4 (through 4/1) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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