Insiders have access to real-time information on their companies and often also have a wealth of experience and knowledge that can help them evaluate their firms’ prospects. If they are spending large sums of money on company stock, it’s generally worth taking a closer look.
In this report, we are going to highlight some interesting insider buying at APA Corp (APA:US). APA Corp is an energy holding company that operates through its subsidiaries: Apache Corporation and APA Corporation Suriname. These subsidiaries have operations in the US, Egypt’s Western Desert, the United Kingdom’s North Sea, and offshore Suriname. The company is listed on the NASDAQ Global Select Market and currently has a market capitalization of $14.1billion.
APA Corp: Insider Buying
Our data shows that on February 25, board member Chansoo Joung bought 40,000 APA shares at a price of $32.92 per share. This trade cost the insider approximately $1.3 million and increased his holding to 65,285 shares.
Experienced Energy Investor
This trade is worth highlighting due to the fact that Mr. Joung – who joined the board in 2011 – has spent almost his entire career in the investment management industry analyzing energy companies.
Previously, he was partner and senior advisor at Warburg Pincus LLC, where he was responsible for making and monitoring investments in all sectors of the energy industry, including upstream, gas and gas liquids processing and transportation, and electric power. He was also responsible for global coordination of the firm’s renewables activities, including wind, solar, biofuels, and grid storage.
Before that, he served at Goldman Sachs, where he held increasingly senior positions, culminating his 17-year career as Head of the Americas Natural Resources Group in the investment banking division.
This experience means he is likely to have an excellent understanding of the investment potential here.
Strong Q4 Results
APA Corp is benefitting from higher energy prices right now.
For the fourth quarter of 2021, revenue amounted to $2.4 billion, up from $1.3 billion a year earlier. Meanwhile, net income attributable to common stock amounted to $382 million, or $1.06 per share, up from $10 million, or $0.03 per share in Q4 2020. Net cash provided by operating activities in the fourth quarter was $1.1 billion compared to $498 million a year earlier. On the back of these results, the group raised its quarterly dividend to $0.125 per share.
Looking ahead, management was confident in relation to the outlook. “2021 was an important turning point for APA with several key financial and operational accomplishments positioning us very well for the future,” said John J. Christmann IV, APA’s CEO and President. It’s worth noting that the company expects to generate approximately $6.5 billion of free cash flow over the next three years based on a WTI price of $78/barrel.
In light of these results, and the strength in energy prices, we see the insider buying here as a bullish indicator.