with $.3B in the bank can not have its stock deteriorate over time. It is inevitable! Just trying to bring some common sense here. Notice the price drop with oil at $110!!!! You guys are funny dudes but so is that hedge fund fella a few months back on television speaking about his APA stake. Boy did I chuckle and so did my clients. Comedy Central.
WOW......a lot of ignorance in your posts. Clearly you haven't looked at AOPA's debt maturities. or debt service ratios. Below you make another ignorant comment re: APA's ability to refi and its relation to stock price. Lets look at the facts re: your statements:
1) APA has very solid credit (A-) and its first debt maturity is in 2017 the amount is only $1B......less than current cash. After that, the next maturity is in 2021 for another $1B with the significant majority of the debt maturing 2030-2040 at very attractive coupons (for APA).
2) stock price has ZERO bearing on ability to refi. Refinancing is based solely on debt service, assets and to a lesser degree credit rating. APA has outstanding metrics in all of the above three categories.
You make yourself look foolish with such ignorant posts. If you were trying to make a bearish case for APA your argument would be better reasoned if you called for a dramatic plunge in oil and Gas prices thus affecting debt service ratios.
It is called leveraging your money. How do you think they were ever to establish that debt. It comes from proven reserves. Ask anyone about apa mgmt team. They are savy guys.you can buy me a beer when the sto k hits 110. word to the wise,dont pay any attn to this guy and sell your stock. You even pick up a 1% divy while you wait. The stock has jumped from 73 to 87 within 6-8 weeks. Must be all that debt holding the stock down. Stock was also upgraded last week and today by divestion 3 billion from their holding in egypt. Stock popped 7 bucks the next day. Yea, I better be pretty caucious about now. Get er dun boys
Yes, as a value investor - and I have to say APA shares are massively undervalued - I have to say it's the company's huge debt that is keeping me away. I love undervalued shares, but as a Benjamin Graham acolyte, I want reasonable debt.
Wes, I have the answer for you. Pay attention and put the thinking cap on. it's called CASH FLOW. I suggest you look it up in dictionary and read about it. MAYBE then you'll understand. When you think you have it figured out..... tell us based upon current cash flow how long it would take to pay off their debt if they choose to do it.
It isn't cash flow that pays the dividends, pays for future growth, pays down debt and buys back shares. It's FREE cash flow.
And, better yet, not just the normal non-GAAP definition of free cash flow. I prefer Buffet's version of free cash flow that he calls "owner earnings".
Now Wes has clients. No viable risk assessment. Just spouting off about debt. And pretending to be brilliant about trading a company that has been tracking sideways for months. There is no reference point for your trades Wes. And even if we had one, nobody cares whether you rolled the dice correct this week or last.
Been short APA in the 90's my friend hehe, covered twice already and reshorted twice. Posted them all ahead of time. As well as I will tell you where this one covers in the 60's again.
Lindsay, as for an investment in the 60's I think it will be dead money for a while and do not see a compelling argument. My clients are very happy though thanks. As the stock price deteriorates, the risk of financing that huge debt climbs with the added shakeyness of its assets. Not a good bet. I like my COG though and I have been in that for a while.