UBS’ Bottom Quant Stocks In AI, IT, Healthcare & Others: 29 Stocks In All Sectors

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27. APA Corporation (NASDAQ:APA)  

Number of Hedge Fund Investors In Q2 2024: 31

Sector: Energy

APA Corporation (NASDAQ:APA) is a mid-sized oil and gas exploration and production company based in Texas. Amidst a weak global oil industry that has seen prices dip due to weakness in China, the firm’s shares have struggled on the stock market. APA Corporation (NASDAQ:APA) ‘s stock is down 34% year to date as it has also struggled with weak natural gas prices. However, oil continues to drive the firm’s hypothesis as 81% of its production revenue is from it. APA Corporation (NASDAQ:APA) has also reportedly been forced to sell assets in the lucrative Permian Basin to raise funds and reduce its substantial debt. As of June 2024, the firm had $6.7 billion in long-term debt. For the stock to perform well in the future, oil prices have to stabilize and APA Corporation (NASDAQ:APA) has to continue working with energy giant Total for its offshore oil production project in Suriname.

Ariel Investments mentioned APA Corporation (NASDAQ:APA) in its Q2 2024 investor letter. Here is what the fund said:

“Oil and natural gas explorer, APA Corporation (NASDAQ:APA), also traded lower in the quarter following an earnings miss. Weaker-than-expected production guidance and an upcoming increase in capital investment weighed on investor sentiment. Meanwhile, APA raised its cost synergy targets from the recent acquisition of Callon Petroleum Company, which stands to enhance the scale of the company’s existing Delaware Basin assets. The increased operational savings appear accretive to key financial metrics in late 2024 and beyond. APA’s wells continue to deliver strong performance in the Permian Basin. The company also is expressing confidence in its Suriname development. Management remains laser-focused on increasing the operational efficiency of the Callon assets, free cash flow generation and returning capital to shareholders via buybacks and dividends.”

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