| Account | Shares | Price | Value | % of acct | Cost/sh | Gain $ | Gain % | Target |
|---|---|---|---|---|---|---|---|---|
| 401K | 79 | $44.21 | $3,493 | 0.14% | $23.47 | $1,639 | +88.4% | — |
| RLT | 432 | $44.21 | $19,099 | 1.14% | $23.00 | $9,162 | +92.2% | — |
| Total | 511 | $22,591 | 0.50% | $10,801 | +91.6% | 0.6% |
In short: The gas leg, unchanged: "We own natural gas. If you look, we own the old Apache company, which is APA."
APA — the company formerly known as Apache — is the natural-gas half of the producer book, held unchanged from his previous appearance: "we own natural gas. We own the old Apache company, which is APA."
Gas matters separately from oil in his framework because it is the one critical energy resource the US genuinely has in abundance, and because gas demand has a growth story attached to it (power generation) that oil does not. Like the rest of the energy book, it sits at single-digit earnings multiples against a 42 CAPE for the index.
42:56If you look, we own the old Apache company, which is APA. We own Antero. God, what a cheap stock. Seven or eight times earnings. Then we own the pipelines. We own Enterprise Products and MPLX, Energy Transfer. We kind of up and down the way. And then we own a little bit on the service side.
In short: Named with Antero as the gas leg of the portfolio — "Apache or APA, the APA now." Part of the cheap-on-relative-basis energy book at eight-to-nine times earnings.
APA (the old Apache Corporation) is an international oil-and-gas producer with big positions in the Permian, Egypt and the North Sea. Oakley names it alongside Antero as his gas exposure.
Same logic as the rest of the energy book: it's part of a group trading at single-digit multiples of earnings with real dividends, while the index it sits inside trades at 25 times earnings and a 42 CAPE. He's buying visible profits cheaply, not making a directional oil call.
6:27And then we own get natural gas companies like Antero, Apache or APA, the APA now. And we own drillers. We own Schlumberger, we own Transocean. In other words, you have to own the service companies, you have to own the producers, and you have to own the midstream. And we're not as big on the refiners, but you can probably own those as well.
In short: Hotchkis & Wiley (Value Opportunities): a discount-to-peers pitch on an unloved E&P. Quarterly results "were in line… but the stock fell as oil retreated due to optimism about a resolution to the conflict in Iran." The case: "strong free cash flow generation driven by favorable natural gas price differentials and underappreciated reinvestment opportunities in Suriname, Egypt, and potentially Alaska." The bear objection is named and priced: "despite concerns over shorter Permian resource life, APA trades at attractive value metrics relative to its free cash flow yield and remains leveraged to a structurally undersupplied global energy market," with "an investment grade balance sheet" and "a valuation discount to its peers."
APA drills for oil and gas in the Permian Basin of west Texas and in Egypt. The shares fell during the quarter because oil retreated on hopes of a settlement in Iran, not because anything went wrong at the company.
Hotchkis & Wiley own it as a valuation case. It generates strong spare cash, helped by getting better-than-average prices for its natural gas, and it has drilling prospects in Suriname, Egypt and possibly Alaska that they think the market ignores. The main bear argument — that its best Permian acreage will run out sooner than rivals' — is acknowledged rather than dismissed; their answer is that the shares already price it, since APA trades cheaply against the cash it produces while carrying an investment-grade balance sheet.
Full passage: premium transcript (PDF).
In short: Owned. "A sitting duck" — 400k bbl/d, mostly Permian, plus Egyptian assets that "mint money" during Mideast conflict and a Suriname asset (with Total) making oil in ~2 yrs. Take-out math: recent high ~$45, someone pays $50 all-stock, take ~$350M SG&A to zero × a 5–10x multiple.
APA (the old Apache) is a US-listed producer Smead owns and calls "a sitting duck" — a likely takeover target. It pumps about 400,000 barrels a day, mostly in the Permian, plus assets in Egypt (which make outsized profits when Middle East tensions push prices up) and in Suriname, where a project with France's Total should start producing oil within two years.
His takeover math is simple: a buyer pays around $50 a share all-stock (versus a recent high near $45), then eliminates APA's ~$350 million of corporate overhead — and every dollar of that saved overhead, valued at a normal 5-to-10-times multiple, is instant value for the acquirer. That's the "all-stock deal" playbook he expects to see more of as the industry consolidates.
38:22— Yep. — Apache is doing 400,000 barrels. A lot of that in the Permian. What else they own? They own Egyptian assets, which when you have a little problem in the Middle East and you produce oil and gas in Egypt, you can mint money for a season. — Mhm. — And then they have Suriname, which is next door to Guyana, and they're building over time, nothing near term, an asset in Alaska.
In short: Energy pick (oil-tracking) — likes the chart and valuation; a five-year chart shows it broke its long-term downtrend last year, and the P/E and Price/Sales are "extremely undemanding." Part of a long-term valuation elevation toward growth-stock multiples.
APA is an oil-and-gas producer. Haymaker likes it on two counts: the chart (its price broke out of a multi-year downtrend last year) and the valuation, which is very cheap on both earnings and sales versus how the market prices growth companies. The bigger idea is that beaten-down, hated energy stocks like this are slowly being "re-rated" — investors warming up to them so their valuations drift higher over time toward normal levels.
In short: Another energy name from last year's thesis that has more than doubled.
APA Corp (formerly Apache) is an oil-and-gas producer. Another energy name from last year's thesis that has more than doubled — further proof, in his telling, that the hard-asset rotation is underway.
1:43So, we're going to get to that. And I also want to get to what is still lingering here, which is obviously the strength still in the semiconductor space. It shocks me, I think, as much as it does you in terms of the secular trade still not yet becoming cyclical. So I threw a lot in there and as well as the stuff going on in the Middle East, you were already talking last year before the Iranian war that how oil might start to go even higher as a result of what's going on.
In short: "A good illustration" of his energy-accumulation method: a 2-year breakout that has settled back and looks poised for longer-term range expansion. Dollar-cost-average energy on ceasefire-hope weakness — the lost-supply + SPR-replenishment thesis means oil doesn't snap back to $60–70.
APA (formerly Apache) is an oil producer Hay uses as the example for how to play his energy view. His big-picture point: everyone assumes oil falls back to $60–70 the moment the Strait of Hormuz reopens, but he thinks that's wrong — about a billion barrels of supply have already been lost (heading to ~1.5 billion), strategic reserves are near-empty, and refilling all of it takes years. So oil should stay higher and tighter than the crowd expects.
How to act on it: rather than buy energy stocks in one shot — they're very volatile — he buys a little at a time (dollar-cost-averaging) on dips, especially when ceasefire hopes knock prices down. And he targets names that already broke out to multi-year highs and have since "settled back," because those tend to be coiled for the next leg up. APA is his illustration of that kind of name. The takeaway is the method (average into pulled-back energy breakouts) more than a hard buy rating on APA specifically.
In short: Cole — owned (US); a consolidation target. ~$350M of SG&A to wipe (they capped zero SG&A on the Callon deal); offshore + Permian. "They should be" bought as US oil consolidates like the banks (an SG&A/scale game); run the saved SG&A at 5–10x.
55:44— They don't synergies. — So this back to the the cost-saving synergies like the oil business as we talked through in a prior time with Meg, just go look at SGNA. Yeah, — you're going to wipe a lot of that SG. The other thing, you know, the tech stack in the in the banking business is a big deal.
In short: Owned (US producer). A "nice offshore asset coming online over the next few years" in the Ghana/Suriname region — the natural long-life extension major US producers reach for when they won't build long-life assets in Canada. Permian (short-cycle) + offshore (long-cycle).
APA (the old Apache) is a US producer Smead owns. Beyond its short-cycle Permian shale, it has a big offshore project coming online over the next few years in the Suriname/Ghana region. Smead likes that combination: fast-responding onshore barrels plus long-life offshore barrels — the kind of durable, long-lived assets the US majors reach for offshore because they won't build them in Canada.
54:44If you're not going to go build long life assets in Canada, offshore is a very natural extension. And so, as I think about places like Gana, we just watched Chevron and Hess fight over Gana. Um, you know, we own APA, who has a nice offshore asset coming online over the next few years there, which is a US producer. Perian and offshore. — Apache, right? — Yeah.
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