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Strategies & Market Trends : Fundamental Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Shane M who wrote (2934)	4/19/2013 11:44:58 PM
From: Spekulatius	1 Recommendation Read Replies (2) \| Respond to of 4719

APA. Is one of the worst performers as well, similar to peer E&P. The material and energy sector has been hard hit, but the performance is not justified by fundamentals, imo. Crude prices are OK and NG prices in NA have actually sharply rebounded. APA has it's annual shareholder meeting in a couple of weeks, so there is a chance of good news, imo. Most downgrades that i have seen were due to "lack of catalysts" but I think there are plenty of things that could unlock value (Spinoff midstream assets as an MLP, activist investors like with MUR, HES, rising NG prices or the companies being more cautious with their cash flow and buying back shares instead of drilling). i think the cheapest place to drill for oil is on Wall Street buying DVN, APA, TOT and the like. Note that cash rich CVX has 2 large joint venture with APA (Kitimat, West Australia) as well as other overlapping assets in NA and could easily swallow APA. I have been adding to my position. Sicking with the oil patch theme, NOV is starting to look attractive. They are the biggest suppliers for critical equipment for land and water based drilling (rig technology, motors, drills, blowout preventers). They are market leaders in most segments and offer the most complete package to their customers. No net debt and PE ~11x. The business is cyclical but they made money even during the downturn in 2008. I think Buffet would approve of NOV and probably buy it at the current price if he could. Critique is welcome. The irony if this competition is that the least risky picks have performed the bet so far. In a nutshell, that is what hurt us, imo.